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Subject:  Low Interest-Rates Forecasted Date:  9/19/2011  12:25 PM
Author:  charliebonds Number:  33325 of 36864

In the larger scheme of things, low interest-rates are Not a Good Thing, because they disincentivize capital formation (the fuel of economic growth). But Bloomie is speculating this morning that the effect of the Fed’s “Operation Twist” will be to keep them low for an extended period.

Investment implications? If you’re already long bonds, you’ll benefit two ways. The value of your holdings increase, and inflation will be kept in check by the deflationary pressure from low-rates. If you’re trying to get long bonds, then you’ll be fighting a head wind and going short stocks is the better bet.
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