People Buy Payments (Or Why Rates Can’t Rise)

Debt drives rates lower….not higher. Debt is deflationary. See chart below and read this: pic.twitter.com/tM2a5BrIiO
— Lance Roberts (@LanceRoberts) July 14, 2017

This past week, the lovely, and talented, Danielle DiMartino-Booth and I shared a discussion on the ongoing debate of why ‘Rates Must Rise.’
For the last several years, I have produced a litany of commentary (see this, this and this) on why rates WILL not rise anytime soon, they CAN’T rise because of the relationship between debt and economic activity.
Most of the arguments behind the ‘rates must rise’ scenario are based solely on the premise that since ‘rates are so low,’ they must now go up. This theory certainly applies to the stock market which is driven as much by human emotion, as fundamentals. However, rates are an entirely different animal.
Let me explain my position using housing as an example. Housing is something everyone can understand and relate to, but the same premise applies to everything bought on credit.

This post was published at Zero Hedge on Jul 17, 2017.