Danger of low interest rates

Danger of low interest rates

Governments around the world have reduce interest rate to almost nil, in their attempt to stimulate the economy and create jobs. It does not seem to work. In spite of low interest rate for more than a year in America and Europe, unemployment remained at a high level. The low interest rate has caused asset bubbles to form in the property and stock markets around the world. It has also damaged the earnings of retirees who gets almost nothing for their savings. The harm that is posed by low interest rate is quite serious and is not being recognized. The longer it continues, the worse will be the bubble and other damages. In the near future, people will abandon cash and buy gold and other commodities. This is already happening and may become a flood. This may lead to high inflation, as money is being abandoned. We may have to study the hyper inflation in Germany in the 1930s t...

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