In the battle between inflation and deflation, low interest rates are an important part of trying to fend off deflation. Ultimately, markets, not central bankers, set interest rates. The high debt levels in Greece, especially relative to projected revenues, are a stark reminder that markets can create their own interest rate policy. The concern, and what needs to be monitored, is the Greece situation could repeat itself in other places around the globe, including the United States. Like many longer-term themes, it is difficult to determine just how long interest rates can remain low. Higher rates would be bad for asset prices and the economic recovery. Higher rates around the globe could spark a deflationary spiral. We are not saying any of this is imminent, but we need to be aware of all possible outcomes and keep a close eye on bond markets and interest rates

Links to Articles & Research On Interest Rates and Debt

• Fed’s Challenge The Wall Street Journal September 2012

• Yields Drop On ECB Bet Businessweek July 2012

• IMF Calls For More Printing Fox Business May 2012

• Central Banks: Forced To Print More? CNBC April 2012

• Student Loans: Extend Low Rates? The New York Times April 2012

• Canadian Rates To Rise? The Globe and Mail April 2012

• Fed Can't Twist Away Sell Signals Ciovacco Capital Management September 2011

• Odds On new Debt Ceiling U.S. News & World Report June 2011

• Fed Will Complete QE2 Forbes April 2011

• Fed To Hold Rates Steady Herald Scotland March 2011

• Rising Rates Favor Gold International Business Times December 2010

• NY State Borrows $1.4 B Bloomberg October 2010

• U.S. Is Broke Bloomberg August 2010

• Feds and Vigilantes Wall Street Journal August 2010

• Greece Sees Lower Rates BusinessWeek July 2010

• Europe Going Too Far? WSJ July 2010

• Moody's Cuts Portugal MarketWatch July 2010

• PIMCO Cautious On Debt MarketWatch July 2010

• China Has Issues Too MarketWatch July 2010

• Fed: Rates Are Fine As Is MarketWatch July 2010

Your use of any of the links on this page constitutes your acceptance of the LEGAL RESTRICTIONS and TERMS OF USE All material presented herein is believed to be reliable but we cannot attest to its accuracy. The information contained herein (including historical prices or values) has been obtained from sources that Ciovacco Capital Management (CCM) considers to be reliable; however, CCM makes any representation as to, or accepts any responsibility or liability for, the accuracy or completeness of the information contained herein or any decision made or action taken by you or any third party in reliance upon the data. Some results are derived using historical estimations from available data. Investment recommendations may change and readers are urged to check with tax advisors before making any investment decisions. Opinions expressed in these reports may change without prior notice. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. The investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is not necessarily a guide to future performance. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. All prices and yields contained in this report are subject to change without notice. This information is based on hypothetical assumptions and is intended for illustrative purposes only. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.