{"id":60268,"date":"2021-11-03T19:08:40","date_gmt":"2021-11-04T00:08:40","guid":{"rendered":"https:\/\/olduvai.ca\/?p=60268"},"modified":"2021-12-22T10:05:52","modified_gmt":"2021-12-22T15:05:52","slug":"artificially-low-interest-rates-so-what","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=60268","title":{"rendered":"Artificially Low Interest Rates? So what?"},"content":{"rendered":"<h3><a href=\"https:\/\/schiffgold.com\/videos\/artificially-low-interest-rates-so-what\/\">Artificially Low Interest Rates? So what?<\/a><\/h3>\n<div class=\"blog-big-photo\"><a class=\"prettyphoto\" title=\"Artificially Low Interest Rates? So what?\" href=\"https:\/\/schiffgold.com\/wp-content\/uploads\/2021\/11\/escalator-5268448_1280.jpg\" rel=\"prettyPhoto\"><img decoding=\"async\" class=\"blog-featured-big-photo lazyloaded\" src=\"https:\/\/schiffgold.com\/wp-content\/uploads\/2021\/11\/escalator-5268448_1280-1024x577.jpg\" alt=\"\" width=\"100%\" data-src=\"https:\/\/schiffgold.com\/wp-content\/uploads\/2021\/11\/escalator-5268448_1280-1024x577.jpg\" \/><\/a><\/div>\n<p>The Federal Reserve has held\u00a0<a href=\"https:\/\/schiffgold.com\/videos\/whats-the-difference-between-naturally-and-artificially-low-interest-rates\/\">interest rates artificially low<\/a>\u00a0for decades. Even after pushing rates to zero in the wake of the 2008 financial crisis, \u201cnormalization\u201d only managed to raise rates to 2.5% \u2014 hardly \u201cnormal.\u201d\u00a0 The central bank began cutting rates in 2019, even before the coronavirus pandemic.<\/p>\n<p>But what difference does it make? Why do artificially low interest rates matter? Peter Schiff explains in this clip from his podcast.<span id=\"more-30127\"><\/span><\/p>\n<p><iframe loading=\"lazy\" title=\"The Solution To Our Low Interest Problem\" width=\"600\" height=\"338\" src=\"https:\/\/www.youtube.com\/embed\/VSJngwJXynw?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>In the first place, artificially low interest rates screw up the way the economy allocates resources and production.<\/p>\n<p>The interest rate is the price of money. Prices send signals in an economy. Think of them as street signs. In a free economy, low interest rates would come about through an abundance of savings.<\/p>\n<p>And if you have a lot of savings, what does that mean?<\/p>\n<blockquote><p>That means that people are not consuming today. Their time preference for consumption is in the future. And so the signal that sends to the economy is, hey, you don\u2019t need to produce a lot of stuff for today because Americans are saving. They\u2019re not spending a lot of money. So, you can invest in these long-term projects that aren\u2019t going to pay off for years and years and years. And so then you end up investing in those types of projects that don\u2019t have immediate returns because you got these low interest rates that are sending the signal that Americans don\u2019t need the money right now. They\u2019re going to save and they\u2019re going to spend the money in the future.\u201d<\/p><\/blockquote>\n<p>But in today\u2019s economy, that\u2019s not why interest rates are low. The only reason interest rates are at zero is because the Fed is artificially suppressing them.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Artificially Low Interest Rates? So what? The Federal Reserve has held\u00a0interest rates artificially low\u00a0for decades. Even after pushing rates to zero in the wake of the 2008 financial crisis, \u201cnormalization\u201d only managed to raise rates to 2.5% \u2014 hardly \u201cnormal.\u201d\u00a0 The central bank began cutting rates in 2019, even before the coronavirus pandemic. But what [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,303,431,534,18779,3650],"class_list":["post-60268","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-fed","tag-interest-rates","tag-monetary-policy","tag-schiffgold","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60268","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60268"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60268\/revisions"}],"predecessor-version":[{"id":60269,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60268\/revisions\/60269"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}