AdvancingTime
Senior Member
- Feb 8, 2015
- 150
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It is interesting to speculate what might of happened if Paul Volcker had not nipped inflation in the bud back in 1980. By the end of the 70s inflation started to soar by taking interest rates to nose bleed levels then Fed Chairman Paul Volcker brought inflation back under control. To those of us who years ago never envisioned the super low artificial interest rates of today it is most ironic to see the concept of negative rates proposed in an effort to continue milking this effect.
Sadly, when low rates are coupled with a massive expansion of new money creation, growing credit spawns debt that at some point overwhelms us and cannot be repaid. At that point this policy yields diminishing returns and has been compared to pushing on a string. The article below delves deeper into the question of whether the power of low interest rates and all the benefits garnered from them are now behind us.
http://brucewilds.blogspot.com/2016/01/has-power-of-low-interest-rates-been.html
Sadly, when low rates are coupled with a massive expansion of new money creation, growing credit spawns debt that at some point overwhelms us and cannot be repaid. At that point this policy yields diminishing returns and has been compared to pushing on a string. The article below delves deeper into the question of whether the power of low interest rates and all the benefits garnered from them are now behind us.
http://brucewilds.blogspot.com/2016/01/has-power-of-low-interest-rates-been.html