The NIRP Hail Mary

by Lance Roberts
Real Investment Advice

Over the past 30 years, many central banks have tried to re-order the natural drivers of economies. As opposed to savings and investment driving production and consumption, they moved consumption to the front of the line, meaning it came at the expense of savings and investment. These efforts disrupt the natural order of activities in a healthy economy and encourages an economic cycle fueled by debt. Central banks’ model, as shown below, illustrates how ever-lower interest rates are used to encourage additional borrowing to drive consumption and lift asset prices; all in the hope of ultimately achieving economic growth.

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