In the News
The Folly of Negative Interest Rates
13th September 2016
John Kay's wisdom shines through in this critique of the negative yields / negative policy interest rates that have spread across many of the world's advanced economies.
About half of all Eurozone government debt, and most Japanese government debt, now carries a negative interest rate. And now some large corporations are issuing new debt with negative yields - although they are not borrowing to fund investment.
Kay's article is strong on some of the huge generational issues that ultra-low interest rates flame. "To provide 70% of gross income for 25 years of retirement when real interest rates are zero requires setting aside 45% of that gross income every year."
Why pay to lend a company money?
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