The Federal Reserve lowering (and keeping) interest rates near zero is harmful. But why? I explain.You might say that we need low-interest rates when we enter into a recession. Even if that were true, we need to make a distinction between lowering interest rates and keeping them low. No, those aren\u2019t the same thing. The Fed could have lowered interest rates in 2008 (which they did), without also keeping them low for a decade.While you might say that low-interest rates are good because they stimulate the economy, this is misleading. Even if it\u2019s good to \u201cstimulate\u201d that doesn\u2019t mean low-interest rates don\u2019t carry other (negative) effects. For example, low-interest rates inevitably lead to speculation in the stock market.You might grant all this and say central banks can do the \u201cprinting\u201d while governments do the regulation. But this is like the scientist who wants to pick and choose the implications of a hypothesis. You can\u2019t have your low-interest rate cake and eat it too. Low-interest rates send a signal, and that signal says to engage in speculation.This is why I find it funny that almost nobody, especially progressives, ever mention the Federal Reserve\u2019s moves that have to encourage income inequality. The billionaires get richer because money is flooded into assets like stocks. Just think of Amazon and Netflix. They\u2019ve burned through cash for years. They weren\u2019t an investment for long periods of time \u2014 they were just speculation. They easily could have failed, and they probably should have failed.Next, think of companies that are nowhere near \u201cmaking it\u201d like Uber. Uber is a unicorn company which is kind of like the opposite of a zombie company. The Fed keeping interest rates low keeps dead companies alive and encourages speculation in companies that don\u2019t have good cash flows or profitability.Think about it:\u2026<\/p>","protected":false},"excerpt":{"rendered":"
The Federal Reserve lowering (and keeping) interest rates near zero is harmful. But why? I explain.You might say that we need low-interest rates when we enter [\u2026]<\/span><\/p>","protected":false},"author":0,"featured_media":2796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts\/3079"}],"collection":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/comments?post=3079"}],"version-history":[{"count":0,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/posts\/3079\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/media?parent=3079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/categories?post=3079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/afluxcoin.com\/es\/wp-json\/wp\/v2\/tags?post=3079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}