Low interest rates in the US and Greece are not a sign of recovery, but a warning of permanent stagnation, creating the potential for future ?nancial instability
It is now nearly seven years since the start of the ?nancial crisis, yet despite growing evidence in America and Britain of a return to relative normality, something remains profoundly broken at the heart of the world economy. One manifestation of this – much discussed among the of?cials, ?nance ministers and central bankers gathered in Washington this week for the spring meeting of the International Monetary Fund – is the persistence of unnaturally low interest rates.Sponsored Ads
If the foundation for your house is crumbling and the house starts to fall, then putting up supports to prevent the fall is not going to fix the real problem. The real problem will remain until the house is allowed to fall and a new foundation is built.
The world economy will remain stuck in neutral forever, or until something – like war – comes along causing a great crash.