Value Investing Why exactly are 0% interest rates bad? |
| Why exactly are 0% interest rates bad? Posted: 29 Apr 2020 03:03 PM PDT So as everyone is aware there is a massive debate raging on in the financial world, there's massive stimulus coming outta every central bank in the world, interest rates are either at zero, close to zero, or even negative. All of this has resulted in a huge rally in asset prices, and a calming of financial markets. At the same time, there's a big group of people who are highly skeptical of all of this, they say the FED is doing the wrong thing, all of this will blow up in our face and result in big consequences later on. Obviously deficits and debt is exploding. So why exactly is there this group of people saying all of this is bad? Japan's been at 0% interest rates for 30 years and while their stock market has obviously lagged, Japan is a healthy stable nation. Europe has been aggressive in this aswell without anything blowing up. Now the United States, worlds biggest economy, reserve currency of the world etc. is doing a similar thing, in what way will this blow back on us? The only negative I can see is that hyperinflation happens but that is obviously impossible in this enormous deflationary demand shock. What happened in Venezuela, Lebanon etc is impossible in a wealthy geopolitically important country [link] [comments]  |
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