Over the past 6 years, Central Bankers have led the world in a barrage of ’emergency easing’ measures that were taken right out of the failed play book of Japan since its property and stock market bubbles burst in 1989.
Similar steps have not surprisingly led to similar outcomes: toxic debt levels in households, corporations and governments, predictably weak demand, resumed asset deflation and mismanaged zombie banks still holding securities at marked-to-make-believe valuations. Here is a direct video link.
As a result, QE liquidity and zero to negative real interest rates through the developed world have failed to ignite desired inflation and growth. North American interest rates continue to be high relative to global peers, and as shown below in the chart of the US 10-year-treasury yield, falling rates seems likely to continue for the foreseeable future. Unfortunately for the growth bulls though, low rates have run to the end of their stimulative efficacy, and demand is likely to slow from here no matter what monetary tricks are tried.
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