Something to ponder in the New Year ..

what would have happened if 20 years ago the Federal Reserve had set the federal funds rate at 5% and held it fixed since?

1) Would the tech bubble have happened or at the very least been much less severe?

2) Would the recent real estate bubble have happened at all?

3) Would people likely be much better off today with significantly less debt?

4) Would people have saved more?

Obviously this isn't what happened so it's difficult to say exactly what might have happened in retrospect for my what if scenario but it should at least make some people stop and think. Personally, I'd like to see what might have happened in the fixed funds rate scenario and have to think that things would have worked out better than they have.

Don't forget to check back to Dan's Deep Creek Blog for future updates.