The Nattering Naybob December 13th, 2017 at 11:45 am
Grant – interest rates are prices and prices convey information and distorted prices convey misinformation
Interest rates are the price of loan funds. When that price is distorted to ZIRP it means one thing, demand for loan funds is like the price, very very low. If demand was high, bankers would raise the rate, its what they live for.
Further, current economic conditions and future expectations are much like the price, very very low and in the case of NIRP, negative. For further elaboration, see Rates and Economic Decline? and What is Money?
December 13th, 2017 at 11:45 am
Grant – interest rates are prices and prices convey information and distorted prices convey misinformation
Interest rates are the price of loan funds. When that price is distorted to ZIRP it means one thing, demand for loan funds is like the price, very very low. If demand was high, bankers would raise the rate, its what they live for.
Further, current economic conditions and future expectations are much like the price, very very low and in the case of NIRP, negative. For further elaboration, see Rates and Economic Decline? and What is Money?