The last time long-term interest rates were this low the United States was in the Great Depression and unemployment was above 20 percent. Today the unemployment rate is below 5 percent, the economy is growing and the stock market is hitting new highs. What gives?

The usual answer is by some right-winger about central banks printing money. He would be wrong. Central banks have less effect on long-term rates than on short-term rates, and quantitative easing has been over for some time.

I would look to trade deficits, the baby boomers and a poorly designed European Union as the answer. The demand for debt securities simply outstrips the supply.

If you were China perhaps you would want to diversify your spare dollars ($360 billion this year) into the bonds of European countries and Japan. But at these rates, currency valuations mean more than rates, and the dollars will most likely find their way home, even if the route is not straight.

As for the baby boomers, 100 minus your age is the recommended percentage of stocks in a portfolio. Old age means less risk. Finally, a great many people are concerned that the structure of the European Union is weak, and that the currency will decline. Maybe investing in U.S. bonds (and a stronger dollar) is a better idea.

But beware of those who want immediate and large tariffs. Our economy is now dependent on low-interest rates, and housing prices and equity (the main source of wealth for most households) is dependent on low interest rates at today’s price levels. America’s $500 billion trade deficit with the world can only be removed slowly.

William A. Johnson

Serotina Court

Mount Pleasant