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<p>[QUOTE=&quot;yakpoo, post: 1145860, member: 18157&quot;]I&#039;m referring to the 10 year Treasury yield, since that&#039;s the vehicle currently used to finance the debt. Without intervention, interest rates would necessarily rise to reach a level of risk/return equilibrium with competing investments. I believe that rate (whatever it may be) will most certainly be greater than the current rate of 3.45%.</p><p><br /></p><p>Since October 2010, the 10 year yield has risen from 2.38% to 3.45% even <b>WITH </b>FED intervention. It was estimated that <b><a href="http://research.stlouisfed.org/publications/es/11/ES1107.pdf" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://research.stlouisfed.org/publications/es/11/ES1107.pdf" rel="nofollow">the effect of the $600 Billion QE2 would be to lower the 10 year bond yield by approximately 50-75 basis points</a></b> so I would expect the 10 Treasury to reach 4.25% rather quickly. </p><p><br /></p><p>As stimulus ends and Treasury yields push higher (assuming no follow-up stimulus), all bond yields will similarly increase...not good for current bond holders, but attractive to new money. Higher bond yields will (as a necessity) attract investment capital from other investments such as equities and commodities (specifically PMs)...imho.[/QUOTE]</p><p><br /></p>

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