Rising Interest Rates Mark Major Changes On Horizon

Since March 2009, the US Fed and other central banks have tried to reflate markets. One of the key ways was to us central bank money to purchase mortgage bonds to help keep home mortgage rates

low. This also encourages money to flow into the stock market as interest rates are not as attractive.

Now US and world interest rates are rising again. The US Ten year yield rose from 2.6 pct to 3.1 pct in two months since October. European yields are also up, and China is going to be raising interest rates again. The EU credit problems are the reason for their higher rates.

China is experiencing inflation, and will be raising interest rates.

Turning point now

The US is going to find out if the Fed can pull longer term rates down, the US Ten year Treasury is a benchmark for home mortgage rates. But if the Fed begins its QE and US interest rates are not coming down, then another new phase is beginning in the credit and financial and gold markets. (more)