Scott Sperling reiterates his view that current interest rates are, “not so abnormal.”  The real anomaly was the last decade.  Deflationary forces are reversing. 

Mr. Sperling remembers his first mortgage rate of 17% in the early 1980s.  Globalization, cheap energy (fracking), low cost of capital and other deflationary forces are no longer.  We tripled our national debt in the last 15 years, and we’ve mostly financed that in short-term treasuries. This is due to rollover at higher rates. Protection of entitlements and increased defense spending are untouchable, and discretionary spending will be crowded out by increases in government Interest rates.

Mr. Sperling believes we are due for a “hard-ish landing” rather than a soft landing, because he’s never seen a soft landing in his experience.