April 15, 2016
By Steve Blumenthal
“Seemingly logical, but as I’ve pointed out in recent years – not working very well because zero and negative interest rates break down capitalistic business models related to banking, insurance, pension funds, and ultimately small savers. They can’t earn anything!”
– Bill Gross, Lead Portfolio Manager, Janus
“The unintended increase in the demand for physical cash caused by negative rates can lead to adverse economic effects. When agents want to hold more cash, the velocity of money drops, the money multiplier no longer works: policies designed to create inflation feed deflation.”
-Tim Hayes, CMT, Chief Global Investment Strategist, NDR
My 18-year-old son, Matthew, came to me asking about how the economy works. This summer he will be an...
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