Tuesday, August 16, 2016

Why Interest Rates Can’t Go Much Lower, 
In Five Charts
John Rubino* highlights how Japan & Europe have been operating with negative interest rates, & it is not working to help the economy .. "The new-age policy mix of negative interest rates and massive central bank bond buying isn’t working. Mainstream economists want to up the ante by lowering rates even further. But there are reasons to believe that not only won’t such a policy work but that it won’t be tried. For one thing, negative rates are already killing the banks .. Banks are shrinking around the world – as are pension funds and insurance companies and everyone else who depends on positive fixed income returns. National economies aren’t growing, while national debt burdens continue to soar. Staying the course in this case means drifting over the falls. So the next round of experiments will probably feature bigger deficits and more aggressive public hand-outs. Which – since these have already been tried and failed – doesn’t give much hope for the future."
LINK HERE to the article

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