Negative Interest Rates as “Black Hole Experiment”

If somebody else thinks what you think, you can’t be crazy, right?

Explanation #2:  you’re both suffering from exactly the same malady.

Either way, it’s reassuring to read famed investor Jeremy Grantham’s latest thoughts on today’s bizarro world of negative interest rates and inflated asset prices, courtesy of the world’s central bankers (not least our very own Federal Reserve) and feckless politicians:

“In a way never seen before, our financial establishments are driving interest rates toward zero and beyond. How will this end? I think of these political, social, and financial experiments as Black Hole Experiments in which the further we push them, the more the laws of physics, finance, or politics begin to change in unknowable ways. We live in interesting times.”

–Jeremy Grantham, “Immigration and Brexit” (July, 2016).

There!  At least I feel better .  .  .

P.S.:  the rest of Grantham’s piece is a “big picture” rumination — as in, 25-50 years out — on Brexit and immigration.

Interesting times, indeed . . .

See also, “Jeremy Grantham for Federal Reserve Chair”; “Grantham:  ‘Let’s Get On With Whatever’s Next'”; and “Jeremy Grantham on How Much Gold to Own.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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