Monday, June 6, 2011
Waiting for Godot
"You might think that the continuation of very low interest rates for a while longer might be a good thing. It isn't. A healthy economy full of vitality and the joys of risk-taking should have relatively high interest rates. Only those economies unable to stand on their own two feet experience continuously very low interest rates. Low interest rates today are not a sign of future strength but, instead, of ongoing current weakness. There is little credit supply, even less credit demand, insipid money supply growth and miserable fiscal austerity. Housing markets, meanwhile, are no longer able to deliver the turbo-charged recoveries of old."