Asset price inflation and the price of gold
“Initially, ultra-low market interest rates can be a boost to economic activity, encouraging consumption and investment spending. However, over time, an artificially lowered market interest rate causes over-consumption and malinvestment . . .”
USAGOLD note: Degussa’s Dr. Polleit delves into the distortions in asset values created by artificially negative rates and why it makes sense “to take some risk off the table by adding portfolio insurance in the form of gold.” His concise analysis and supporting charts are worth a visit. . . .
Repost from 11-24-2019