Monitoring the Monetary System and the Flow of Capital for Forecasting the Business, Financial and Currency Cycle - and Investing in the Emerging Economies from the Euro Global Reserve Currency - on lucabindi.com
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Druckenmiller on the Zero Interest Rates - Zerohedge
you took the taylor rule a normal interest rate given our economic
circumstances would be 4% interestingly. We’re at 1%. In europe, it
would be 2%. They’re at minus 40%. In sweden, it would be 3.75%. They’re
at minus 50%. That doesn’t even count the bond buying we’re talking.
But this is all in the name of this 2% inflation target.
they’re keeping rates in this country, you know, barely above zero, in
other countries, below zero, what are the consequences of all of this?
the consequences are huge because we’ve distorted market signals and
we’re causing all sorts of what i would call misallocation of resources.
Evans: Like bitcoin? or is that unrelated?
Druckenmiller:No, it’s not unrelated at all.Bitcoin,
art, wine, equities, credit, you name it. everything is one way up and
there are huge distortions taking place, and it’s all in the name of
this 2% inflation target.And when you get a misallocation of resources, it really hinders growth over the longer term.
Ratings-New York-11 December 2017: The total amount of global
negative-yielding sovereign debt remains at elevated levels despite the
European Central Bank's (ECB) plan to reduce monthly asset purchases
amid improving economic fundamentals in the Eurozone, according to Fitch
Ratings. As of Dec. 4, 2017, there was $9.7 trillion of
negative-yielding sovereign debt outstanding, up from $9.5 trillion on
May 31, 2017 and $9.3 trillion one year ago.
Fonte: Fitch: $9.7T of Neg Yielding Debt Despite Monetary Normalization