[MoneyGuy]

Deficit spending often sparks inflation. It does more to drive interest rates than does fiscal spending. However, if deficits lead to excessive debt, then this debt is rated lower quality and the market demands a premium rate. The world is trying to boost the market through any means necessary. They’re using monetary policy (lowering rates) and fiscal policy (spending - bailouts) to stimulate the global economy. Often they over react and create an inflationary environment, which then has to be reigned in through opposite monetary and fiscal policies. Rates are likely to stay down and decrease further until economic activity and credit market confidence pick up, and then the world should have a co-ordinated approach to reversing the aggressive policy movements they are now enacting and a future crash can be avoided.