Interest rates are unhealthily low. I looked into the rates for a CD at my bank. The last time I did this, the options were up near 3-4%. Now the rate is .6%. What is one supposed to do with money? Just let it sit and depreciate? Inflation is going up. There is not way it can't with all the money added into the system and with the gas and food prices rising.
Stark said low interest rates over too long a period foster an under-pricing of risk, inducing excessive risk-taking. Low interest rates also delay and ultimately prevent the necessary repair of balance sheets, he said.
"In the end, this turns low interest rates into a curse," he added. "It does not only hinder strong and sustainable economic growth but also compromises price stability over the medium term."
It seems to me, low interest rates got us into this financial mess and so it is counter-intuitive to think low interest rates plus spending will get us out. But that appears to be what we are doing.
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