An Economic and Financial Truth Elegantly Stated in One Simple Paragraph!

High Interest Rates Are Healthy, Low Rates Are Poison The status quo has it backwards: low rates are now essential to prop up the wreckage left from previous doses of default and cascading losses. Charles Hugh Smith Jan 6

The economy prospers when marginal borrowers doomed to default are excluded and risky ventures doomed to fail are tabled.

Low interest rates and loose credit inject default and catastrophic losses into the system, and as these defaults and losses ripple through the tightly bound financial system, they trigger other defaults and losses, forcing financial authorities to reward the losers with bailouts: the profits skimmed from risky lending and investments are private, but the losses fall on the taxpayers and the public.