Impatient Governments May Cause Interest Rate Rise
Matt Golab discusses a CNBC article that sites a recent survey of 60 central bankers by trade journal Central Banking Publication and the Royal Bank of Scotland and it's implications for interest rates and bond values around the world.
PR Log - Apr 08, 2013 - Matt Golab, Founder and Chief Advisor at Aaron Matthews Financial Resources recently discussed a survey of 60 of the worlds Central Bankers.
Matt says, "CNBC recently published an article detailing the actions of some of the world's largest central bankers and the results are somewhat alarming if you hold government or any other type of bond."
Mr. Golab continues, "Now if you read this article that is based on a survey from 60 central bankers who control nearly seven trillion dollars you quickly understand what their issue is. The central bankers are impatient with the low interest rates of U.S. and other governments bonds. Now this is not to say they believe the dollar will collapse or will not be the reserve currency. This is obvious by the central bankers willingness to have their funds in these low interest investments for so long."
Pay Close Attention
Mr. Golab asks, "If you have bonds of any type why should you pay attention to this article?"
Because we are not talking about a few billion dollars here, the Central Banks control over $10 trillion in reserves and their job is to protect that money and to get a return on that money. They are currently showing they are not willing to lose money by holding low interest rate investments.
This survey that's sited in the CNBC article shows the 60 Central Bankers are looking to put their money in higher return investments.
A Very Clear Problem
Obviously, this is a problem for our Government and politicians. They love to spend money and open up programs to more and more people. But the problem may soon be that they have less and less money because these other Central Bankers may not be purchasing treasuries in the same way they would have in the past.
If treasuries are purchased at a slower pace our government will be outspending very quickly. We know that the cycle does not favor spending less but raising interest rates to draw those Central Banks back. This will also cause the interest rates of other debt vehicles (auto, mortgage, credit card...) to rise. Also when interest rates rise the value of portfolios who hold bonds will drop and could drop dramatically much to the surprise of the consumer.
What This Could Mean
Matt Golab concludes, "This could be the start to an interest rate rises, make sure you have your bonds reviewed to see how they will be responding to rises and hints of rises in interest rates."
Matt Golab was recruited to write a chapter in Tom Hopkins upcoming book, Victory scheduled to be released later this year. Matt also received the Editors Choice Award for his contribution to Victory, not every contributor is selected for this high honor.
Matt is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years. The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him into the national spotlight. He is often featured in Senior Market Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to present his knowledge on the areas of retirement and retirement income plans. Matt is frequently featured in The Wall Street Journal, CNBC, MSN Money, The San Francisco Chronicle, Newsweek, TheSmartRetiree, Burlington County Times as well as ABC, CBS, Fox, NBC and USA Today.
Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, “I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market". Contact information for Matt is available at his website,