There seems to be a consensus that central banks should do many things: keep the economy growing, keep inflation low, keep unemployment low, keep a watchful eye on asset prices .....
My view? Nonsense. What they should not do is to keep interest rates too low. They should set short-term interest rates at close to 1.5 times inflation (or 5%-6%). Let the rest of us figure out how to cope with them.
Low interest rates relative to inflation create asset bubbles. Central banks are the main culprit.
More, much more on https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
No comments:
Post a Comment