I mixed things up on you, and see now where I confused.

I did not say interest rates predicted inflation. I said we had inflation to the other part of your statement where you indicated inflation had not shown up. "You may be correct in assuming big inflation longer term" (reply to OldMcdonald). But after going back and looking, you never even said we did not have inflation, just that we have not had "big inflation". So I apologize for making assumptions. Maybe you do think we have inflation. I do.

Since when have the "markets" determined interest rates? No time probably since sometime before Paul Volker was Fed chair. Interest rates have been a matter of central planning, not market forces. Where would interest rates be if the Fed had bought zero US government securities in the last any number of years you want to quantify? We don't know. Because there has not been an interest rate "market". It is an interest rate politburo. Sure interest rates rise and fall on supply and demand. But the rate is underwritten by the Fed buying and selling securities to make sure there is no real way to determine what the "market" rate is. No way have we had a market based interest rate determined by supply and demand. Supply of a counterfeit printing press maybe.

It made a lot more sense in my minds eye than when I explained it to you. Two separate subjects mixed together in the same thought. My bad.

John