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I’m not sure that economies ‘can’ actually crash while running on 0 or below interest rates. I mean why crash when one can just buy more time, it’s free! Just k
by samsonradu 7y ago
I’m not sure that economies ‘can’ actually crash while running on 0 or below interest rates. I mean why crash when one can just buy more time, it’s free! Just keep on borrowing.
I think the real danger is on the other end, hyper-inflation. However, the reason this has not happened yet is due to globalization, cheap money in developped economies flow into emerging economies (China for the past decades), which is not necessarily a bad thing. We’ve only seen massive inflation in products that cannot be imported, like housing.
- MegaButts 7y agoWould you not consider hyper-inflation a recession? If suddenly all my savings, and most everybody's savings, are worth a lot less, it seems like a recession.
- nradov 7y agoWestern countries are far more likely to default than to resort to hyperinflation when they're no longer able to service their debts.
- whatshisface 7y agoI'm not sure what would be worse for world peace, USD hyperinflation or a treasury default.