“the great paradox of nearly-interest-free USD is that cheap money drives down the future yield of all other legitimate yield-bearing assets”
This is something important that a lot of otherwise economically literate people seem to fail to grasp. Yes, there needs to be a cycle in the interest rates so sometimes they need to be low, but artificially keeping interest rates low for over a decade is economically suicidal on the grand scale. The fact that supposedly the more learned economic minds of our country have done this can only mean two things:
a) they don’t realize the damage they will cause by keeping the rates too low for too long, meaning they are too incompetent to be trusted with such important jobs
or
b) they do realize the damage they will cause, but either are doing it for their own benefit, or have some inside knowledge that tells them only by pursuing this strategy can they delay (but not avoid) a larger looming economic catastrophe. Which means they are too dishonest to be trusted with such important jobs.
Either way, it’s a big glaring neon signpost that we are probably facing very very bad times in the years ahead if these same times of people keep setting our monetary policy.
This is something important that a lot of otherwise economically literate people seem to fail to grasp. Yes, there needs to be a cycle in the interest rates so sometimes they need to be low, but artificially keeping interest rates low for over a decade is economically suicidal on the grand scale.
*********
I’m glad you said this and wish more people would listen, but I won’t hold my breath.
Good post BTW.