Friday, August 12, 2016

Prehistoric Economy

"What is this mania you have with telling the truth? You must have been weaned on sodium pentathol or something."
--Fred Flintstone (The Flintstones)

The always insightful Jim Grant offers several nuggets here. I particularly enjoyed this remark related to negative interest rates. He notes that researchers Homer & Sylla could find no instances of negative interest rates in 5,000 years of human history. Driven by recent central bank policies, however, there are now nearly $12 in bonds effectively yielding below zero.

Grant asks, "If these are the first sub-zero interest rates in 5,000 years, is this not the worst economy since 3.000 BC?"

In what ways might the answer to his question be "yes"?

No comments: