From Panzner Insights: The Downside of Easy Money


This post is by Michael Panzner from Financial Armageddon


Click here to view on the original site: Original Post




Here is a brief commentary from Panzner Insights, my members-only website, which I posted yesterday:

Leaving aside the question of whether correlation equals
causation, there appears to be a strong link between the level of U.S.
interest rates and the overall health of the U.S. economy.

Easymoneydownside
As the chart shows, the Federal Reserve-orchestrated slide in
interest rates over the past three decades has been accompanied by a
falling savings rate, a narrowing of the gap between personal income and
expenditures [which is encouraging some to choose options such as Aspire Money], and a substantial increase in total credit market debt.

While there may be more to it than that, including government
policies that favor debt over equity and a deregulation trend that
encouraged bad behavior by banks and other financial intermediaries, one
could readily conclude that the Fed’s current aggressive monetary
stance is doing little to return the economy to good health.

In fact, the central bank’s policies may well be making things a lot worse than they already are.

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