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What's Wrong With Artificially Low Interest Rates?

“Public opinion always wants easy money, that is, low interest rates” – Ludvig Von Mises, A Critique of Interventionism

Wall Street and Main Street cheer on lower rates because they make access to dollars cheaper. With cheaper access, people have more money to spend, their debts are easier to pay off and stocks and real estate prices rise.

It’s all good, right? Maybe not. Here is the dark side of artificially low interest rates.


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On going funding of the banks or bailonomics

Going on 6 years ad they tell us its for the benefit of the economy

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Treasury Warns on dollar collapse

Treasury's report says a default could cause the nation's credit markets to freeze, the value of the dollar to plummet and U.S. interest rates to skyrocket.
How one anyone thinks its a bad idea to have a small allocated insured vaulted gold or silver account is beyond me

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Here is the Fed's rationale for manipulating interest rates down

Just added it to the original post

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QE is going on 6 years and $4 trillion

this seems like its a permanent feature of the economy. It can't be.

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"The" economy? Which "economy" might that be?

"The" economy? Which "economy" might that be? Cause there are two or three of them out there.

There's the general economy, where I and most others live and work in. It kinda sucks.

Then there's the plundocratic government economy, where leeching bureaucrats whittle away their days and collect fat salaries and pensions paid for by me and most others. It's doing great!

Finally, there's the hyperplundocracy known as Banker Heaven, which is in a global historical GOLDEN AGE of free money with which to gamble endlessly at the casino called Wall Street, while never-before-seen profits pour in from a savage fee collection scheme and brutal liquidation of real estate and manufacturing establishments.

QE is a permanent establishment of economies B and C. Its going to kill economy A, but nobody cares as long as iPhones keep popping out of the ether and Mercedes-Benz offers 120 month car loans.

"Cowards & idiots can come along for the ride but they gotta sit in the back seat!"

Agree that point was made in the original post-the wealthy

benefit I would say disproportionately but that would be wrong, they benefit exclusively from QE

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Bill Gross

Bill Gross just came out yesterday and said we will have "low interest rates for decades." http://money.cnn.com/2013/10/02/investing/bill-gross-interes...

Of course, he has been wrong on so much lately. He said sell treasuries and the interest rates kept going lower. Just Google, "Bill Gross wrong again."

We are not Japan. Far from it. But we will face a further deflationary credit contraction. Just look at the CRB Index. But the Fed's unprecedented actions will eventually bring on exactly what they don't want, higher rates. Taper any time soon? forgetaboutit

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

Bill Gross is talking about the bench mark rate

at some point that will become irrelevant if not backed by QE.


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they can taper a little for show but no way can they

really taper much none the less shut down the program. Indeed if they taper they will be back with more purchases later.
How are book sales going?

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It's possible

It's possible they may do $10 billion on the Treasury side, sure. But it will depend entirely on where interest rates are at the time. When we were pushing 3%, I wrote an article saying they won't taper simply because higher rates meant more interest to be paid on the debt. Rates have moved down to 2.61 on the 10 year, which is what they want rates to do in trying to stimulate that for which they can't stimulate.

Book sales are good because Amazon.com advertises it for free! Spending all my free time working on the next book. Timing couldn't be better. Same with the 3rd book, which is now 8 years in the making and will be out in time to hopefully affect next years and the 2016 elections.

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

Agree, Bernanke thought he could taper QE without

having rates go higher. He found out that rates are low because of QE not because of the fed funds rate. So they need QE still. A taper of $10 billion can be squeezed in short term for a month or two but not much more.
Congrats on the books sales. Good luck with the next one!

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