Dennis Dachtler has been watching interest rates as they’ve continued to drop over recent years. As a lifelong businessman and entrepreneur, Dennis Dachtler knows these rates tend to fluctuate as the economy ebbs and flows. Interest rates are only one of many notable factors in the current economy. Along with others in the business world, Dennis Dachtler is watching these factors to predict where the economy will go next.
According to Dennis Dachtler, the 1.6% recently yielded by the U.S. Treasury is at levels the country hasn’t seen since before World War II. Dennis Dachtler points out that bond yields are largely affected by the European debt crisis. U.S. Treasuries are popular with European investors as a safe place for their money during uncertain times.
As Dennis Dachtler points out, however, interest rates are directly connected to supply and demand. Unfortunately, low interest rates can pose a problem, according to Dennis Dachtler, because they have the potential of scaring off investors, who aren’t interested in putting money into an investment where the inflation rate is higher than the rate of return. If investors are scared off in large numbers, yields could rise as a result of demand decreasing.
Many are currently worried about inflation, reports Dennis Dachtler. Since higher inflation often brings higher interest rates, this could potentially drive bonds downward. For example, a one percent increase in interest rates would drop a bond’s value by about five percent, and a two percent increase would drive it down as much as ten percent.
The deficit is of paramount concern to experts like Dennis Dachtler. Recently, the USA Today estimated that each household would have to pay more than $500,000 to take care of the Federal debt as well as commitments to retirees. The Federal debt is up to $5 trillion when retiree payments are included, but many Americans aren’t concerned about this number, observes Dachtler.
As Dennis Dachtler explains, one trillion dollars would weigh 22 million pounds and fill numerous briefcases. To better hit the point home, Dennis Dachtler believes it helps to see the aforementioned debt written out with zeroes–$5 trillion becomes $5,000,000,000,000.
The economy is a subject that concerns many Americans, but with so much uncertainty, it’s hard for people to know what to do. By breaking down the statistics into easily understandable elements, Dennis Dachtler believes it’s far easier to grasp the situation that our country is currently in. For more information, contact Dachtler Wealth online at www.dachtlerwealth.com.
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