Thursday, September 15, 2016

Bernanke is an idiot

Read: Bernanke Urges Use Of Negative Rates When Next Recession Strikes

In theory, lower rates stimulate the economy.  Let's say that a firm has a potential investment that will return 10% and it can borrow at 5%.  That may not be enough profit margin to make it worthwhile, considering the risk.  But if it can borrow at 2%, now it may make sense to do the investment.

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