, Columnist
Why So Negative? Interest Rates Bid Goodbye to the Insanity
Cheap money doesn’t guarantee solid financial futures. Rejoice that the ECB and perhaps the BOJ will soon be on the other side of zero.
Going from negative to positive.
Photographer: Fred Morley/Hulton ArchiveThis article is for subscribers only.
Can we dare to dream of a world where negative rates disappear and the natural order of borrowing money — by actually paying for it — reasserts itself? It’s only taken runaway inflation to change central bank thinking, but last week something broke.
I have long argued against the folly of inverting the time value of money. It’s unnatural! Madness lies in being incentivized to borrow: We spend more than we earn and our children and their children will be saddled with paying all of it back. Ballooning debt burdens offer only temporary relief but ensure long-term misery.