...... if firms do have funds to invest, they are too uncertain about future economic conditions and so whether the possible return on investment will justify its cost. ......... this second explanation would imply that easy conditions are not the key determinant of investment. This section discusses these two hypotheses in turn.
This statement was taken from the quarterly report of the Bank of International Settlements (BIS, the bankers' bank).
What is amazing to me is the even THEY know full well that NIRP, ZIRP and QEs do nothing to improve the world economies. In fact one can make the conclusion that these monetary policies punished the global economies rather than help them.
Economies cannot grow without investments to improve productivity. This is not happening because the markets are not providing the right signals. The outcome is that business people are confused.
The pricing mechanism has been distorted with equity markets soaring because of increasing stimulus and not because or rising profits.
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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Author, Profiting in Bull and Bear Markets
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