Satyajit Das in Wednesday’s Financial Times:
'A sustained period of low rates, such as the one the world is experiencing, makes it difficult to increase the cost of borrowing. Levels of debt encouraged by low rates rapidly become unsustainable when they increase, as is evident in Europe. This reinforces the financial distortions implicit in the policy.
For the moment, policymakers are relying on the advice of actress Tallulah Bankhead: “Cocaine isn’t habit forming. I should know – I’ve been using it for years.” But reliance on low interest rates, like all addictions, is dangerous. It is also ineffective in addressing the real economic issues.'
(Read the complete article here.)
Ah well, the medicine is making us slowly but steadily sicker.
But in the long run we are all dead, as another economist used to say.
And who is Tallulah Bankhead again?