I happen to be an expert on this topic (i.e. I work as the technology person on a fixed income trading desk managing $28 billion of assets including a few billion in mortgage backed securities).
You likely won't get high interest rates like 8% unless you have higher inflation rates
This is completely wrong. The only thing preserving low interest rates is the Fed purchasing mortgage backed securities (see http://www.newyorkfed.org/markets/mbs_faq.html). When that stops, interest rates will go up dramatically. You could argue that the Fed will only stop doing that once inflation kicks in but that is not true. The Fed is on extremely thin ice as it is now. They're only supposed to purchase and sell Treasuries for their open market operations (http://www.federalreserve.gov/monetarypolicy/openmarket.htm) and manipulating the mortgage market is significantly outside of their charter.
So someone who makes 2000/month right now, by the time the Interest rates increase to 8%, their salary would have Also increased.
There are literally millions of possibilities that could happen that don't fit your theory. Never heard of stagflation?
My goal is not to write a dissertation in an HN comment so that's enough for me.
You likely won't get high interest rates like 8% unless you have higher inflation rates
This is completely wrong. The only thing preserving low interest rates is the Fed purchasing mortgage backed securities (see http://www.newyorkfed.org/markets/mbs_faq.html). When that stops, interest rates will go up dramatically. You could argue that the Fed will only stop doing that once inflation kicks in but that is not true. The Fed is on extremely thin ice as it is now. They're only supposed to purchase and sell Treasuries for their open market operations (http://www.federalreserve.gov/monetarypolicy/openmarket.htm) and manipulating the mortgage market is significantly outside of their charter.
So someone who makes 2000/month right now, by the time the Interest rates increase to 8%, their salary would have Also increased.
There are literally millions of possibilities that could happen that don't fit your theory. Never heard of stagflation?
My goal is not to write a dissertation in an HN comment so that's enough for me.