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January, 2008
Interest Rates: History Repeats Itself?
If the short/medium term scenario contemplates lower rates in the United States and probably in Europe, the long term picture supports much higher rates. In fact, since 1900, the long term interest rate bullish cycle in the United States has lasted about 30/35 years from lows to highs. The first cycle began around 1900 and continued until 1932. The second cycle started around 1947 and ended near 1980. The full cycle of the long term interest rates from lows to lows lasted approximately 50/55 years (1900, 1947, 2002). Within those long term bullish cycles interest rates have shown the tendency to bottoming every 8/10 years before again targeting higher levels. If those characteristics would be repeated in the future as well, current interest rate bullish cycle, has still a long way to go before topping (2030-2035).
Long-term U.S. interest rates bullish cycle since 1900
Long-term U.S. interest rates low to low cycle since 1900
Long term U.S. interest rates high to high cycle since 1900
Long term U.S. interest rates low to low cycle within a bull trend since 1900
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