[eweissenbach]

The problem with high interest rates is that they are generally accompanied by inflation. In the late seventies and early eighties you could get 12% on a CD, but if you had to borrow for a home or a car you paid 15% or more. Inflation during those years was 10-14% so after paying taxes on your earned interest, your buying power was basically negative. The inflation rate currently is 1.3%, so the buying power on your income is not eroding much. At seven percent inflation your buying power is cut in half over about ten years, not good for people on fixed incomes. There are always pros and cons to any investment and economic scenario, but low inflation plays pretty well into most people's strategy.