Interest Rates Falling: the Bad, the Good

by Minority Fortune

interestratesPeople are taking the safe roads during the current rocky economic period. They’re loading off their investments in the safest options. This comes with its sets of pros and cons. For one, safer investments are paying out dismal interest rates. It means that most savings aren’t earning much money at all. Recently, the treasury rates have been lowered to an estimated 3% interest for ten years. It doesn’t bode well for the economy.

Forbes Magazine notes that the falling treasury interest rates indicate that the economy will continue to remain in a mess and contract. Consumers aren’t spending money. Businesses aren’t borrowing. Debt is expanding. Worst of all, the subprime effect hasn’t fully blown over yet. Its reported that there’s about $600 billion in commercial mortgage-backed securities that are speculated to default next year. What madness!!

The one good thing that comes from this is a lesson on practicality. Individuals are investing their money in safe, guaranteed returns and aren’t tossing their money at quick, volatile gains. People are holding tight to their assets. Even banks are opting for treasuries for solid small gains. There’s an additional avoidance of adding onto debt and liabilities. These actions will prove handy for a lifetime of financial management.

*Image courtesy of Medioimages/Photodisc.
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