Zero rates are a hidden tax on savers that act to reduce NPLs [Non-Performing Loans] and transfer money from savers to debtors and their lenders. I should also point out that zero rates lead to a depreciated currency as the demand for a currency with low interest rates drops vis-a-vis currencies where interest rates are higher. So, in this sense, zero rates are also implicitly a form of currency manipulation, something to remember when thinking about the Chinese and their own currency games.
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| — | Edward Harrison in Three ways to keep NPLs down, recapitalize banks, and socialize losses all at the same time |
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