Economic Future

I'm starting to get a picture of the near term economic future.

Looking at President Obama's massive spending increases for this year and the next several, its starting to appear that the major borrowing that the government will require is going to put strong pressure on interest rates to climb. The only way to avoid this is for the Federal Reserve to print money and buy the debt, but if they do this then inflation will increase dramatically. Either way will be a drag on the economy. Also, the governments massive borrowing is going to crowd out the money that could be lent to businesses and the rest of us.

My hope is that the Fed will not print money and will allow the interest rates to go up. I can handle the increase in interest rates better than inflation. I don't think anyone wins with inflation. Higher interest rates might make the government rethink all the massive spending it wants do.

We'll see what happens.