International Financial Markets

One of the most remarkable features of the modern economy is that interest rates are negative in real (ie, after inflation) terms and are expected to remain so. This is not unprecedented. Real rates were negative after the Second World War and again in the 1970s. But in both cases inflation was much higher than it is today. If the rate is held at an artificially low level for too long, the danger is that capital may be misallocated. The temptation will be to finance speculative property developments rather than new factories. However that is not enough. It means only one thing. The conventional arms have run out. What are the new ones? You will find out. And even much more than that. If you buy this book.