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Jack De GanWhat's on Jack's market watch list? Frequent CNBC-TV guest contributor and Harbor Advisory's Chief Investment Officer, Jack De Gan, is keeping an eye on:

100 Year Treasuries?

August, 2016

The average maturity of the $19 trillion U.S. Treasury debt is now about 5 years and costs taxpayers just over 1%. We continue to suggest to our clients that it makes good sense to refinance their personal mortgage debt at these historically low rates. If it makes sense on an individual family basis, it makes sense for our highly indebted country.

We believe rates will rise one day to the mid-single digit rates that have prevailed for most of the last century. If the Treasury could lock in these extremely low rates it would save taxpayers money in the future. Nearly as importantly, it would save the economy from a potentially enormous shock that could come with a fast increase in rates.

Currently the longest maturity bond issued by the Treasury is 30 years and costs taxpayers 2.3%. Some countries are issuing 50 year bonds and at least one has issued 100 year debt. We think it makes sense for the U.S. Treasury to do the same. Of course this would raise interest payments currently to save a much greater amount in the future. Does the Treasury have the fortitude to trade short-term pain for long-term gain? Let’s ask our legislators and find out!