The Worrying Side Effects of BZIRP
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The Financial Times takes a
look at the blossoming of Below Zero Interest Rate Policy in Europe (aka
BZIRP, where investors pay to lend money to borrowers) while wondering where
it’s all headed in the short-term (e.g., currency wars) and long-term (maybe
much worse).
The soothing British accents notwithstanding, this strikes me as another
example of the relative calm that is experienced when venturing further out
into uncharted territory (e.g., like when there was a commonly held belief
that U.S. home prices never decline).
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Tim Iacono is the founder of Iacono Research, a subscription service providing market commentary and investment advisory services specializing in commodity based investing.
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