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WhiskeyTangoFoxtrot writes:

Not only that but pension funds rely on a return on investments in bonds. Current rates will destroy these funds. Calpers, the largest private pension fund earned a 1% return last year. The fund managers had predicted a 7.5% return. Some real geniuses there!

Unfortunately rates will never be allowed to rise by the Fed or .gov. Why, because there is no real capital being reinvested. Business is being funded with debt. If these corporations are forced to role existing debt at higher rates they are toast. This is deflationary and the Bernanke will never let that happen.

Then there is the $16 trillion in national debt. If rates go back to 6% or 7% the country is toast. See Spain, Greece, Italy, etc. The Spaniards are crying due to 7%. This game will be played until it can't. When bond holders begin to lose confidence and demand higher yield the game will end. How much longer can the game continue? That is the $16 trillion (and rising) question!

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