Interest Rates Are Low Due to Demographics in the Developed World, Not the Fed : Small Time Blog

Interest Rates Are Low Due to Demographics in the Developed World, Not the Fed

by Bradley Voight on 06/15/16

Interest on the German 10 year bund went below zero for the first time ever this week as the US ten year bond is nearing 1.5% again, a level not seen since August of 2012. It is actually very simple to figure out, the developed world is aging and the emerging economies represent the youth needed to spur growth. India has surpassed China in annual growth rate pushing above 7% and lets not forget that India is the worlds largest democracy! India is also trying to build out it's infrastructure growth with renewable energy sources rather than dirty old coal. 


The US population is 300 million. India and China together growing at even 5% is 5% on 2 billion people, or roughly 28 percent of the world. America is 4 % of the world. US multinationals make 80% of their revenue overseas so I am sticking by my bullish call, which is that the world economy is likely to keep expanding through 2020 with very few hiccups. Cross your fingers and hold on, Dow 20,000 just around the bend!

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