Lost: $25 Trillion Worth Of Yield
One thing that should be self-evident, but is most assuredly not for the vast majority of retail investors who like to posit "alternative facts" to explain why the risk assets in their E*Trade accounts have been a one-way ticket higher for the past nine years, is that when you create a scarcity of something for which there is demand, the price for that something rises as everyone clamors for it.
That's the whole goddamn premise behind ultra-accommodative policy. You work on the supply side of
What few ever talk about, is that for every dollar a borrower saves in a low interest rate environment, a lender loses in lost income.
Yeah really. So I wonder, if interest rates were normalized again to 5-6%, quadrupling the lender’s income, would that boost spending on the part of all the savers who’ve been financially repressed with a decade of ZIRP and, by now, must have much pent-up spending needs?
Trying to stimulate spending with uber low rates for would-be borrowers who are already indebted up to their eyeballs, is like pushing on the proverbial string, I think.