As a Financial Representative and Money Manager, here is my take:
The interest rates on government bonds here have fallen in the last month. With the dollar having weakened, foreign investors are looking at other options. Having said that, we can easily absorb this selling. There are over $5 Trillion in Money Market and Savings Accounts in this country. These funds would love to be able to earn some higher rates. A small rise in interest rates would easily absorb this.
I suggest that anyone needing a reality check on our economy and how wealthy our country is go the Federal Reserve web site and print out the latest version of the Flow of Funds Report. Some of the highlights:
$7 Trillion in Home Equity, over and above the total mortgage debt, including second mortgages, consolidations, etc.
The aforementioned $5 Trillion
Over $10 Trillion in Stock and Mutual Funds
A net worth of $46 Trillion, including all the debt we owe in this country. For those that are fearful of the future, rest assured that we are continuing to create wealth at a rate that is astonishing.
Hope this comforts many.
"A net worth of $46 Trillion,"
Which is a little more than half of the entitlements to be paid to the retiring Baby Boomers over the next 20-30 years.
I dont doubt that America continues to create wealth. I am just wondering if the federal fund stats can be trusted and exactly what industries are creating this wealth. Because it appears that our GDP is way down and my understanding of economics is that the GDP is the basic barometer of wealth.