Right so continue the money cycle. Lets say you take out a loan from the bank. There’s a low interest rate but it’s not zero so you better do something with it

Right so continue the money cycle. Lets say you take out a loan from the bank. There’s a low interest rate but it’s not zero so you better do something with it because you’ll have to pay the bank back. Maybe you could start a business making widgets but that’s really risky. It would be smarter to buy an appreciating asset like some real estate or maybe a share in a company. And hey a lot of people are buying assets so you know that as long as rates stay low someone else can borrow money to buy it off you at a higher price and you can pay the bank back and pocket some money. Or worst case someone with money saved might take it off your hands. Thats fine but we didn’t actually provide a good or service to the economy! All that’s happening is money is just wizzing around in equities markets inflating asset prices at best or creating dangerous bubbles at worst. If neutral rates were higher then people with cash who want to invest would be more incentivized to buy a bond instead of a stock. But because the rate is higher the issuing company has to make at least that percentage to break even let alone make a profit. So they will need to make more widgets, which means they have to hire more people. The down side of course is that rates are so high that companies can’t make enough money to pay back debt holders so they default and fail and have to fire everyone.