Savers, retirees are the most impacted from 0% interest rates. How can a person retire when interest rates are negative calculating inflation? Retirees are pushed into more risky assets to preserve their wealth from inflation. Inflation does not create wealth, inflation steals the value of your currency to inflate market bubbles somewhere else. Inflation is theft. This whole idea that deflation caused the Great Depression is a myth. Inflation caused it, deflation was the painful cure, the medicine. During WW1 the world governments went off the gold standard to finance the war with deficit spending and printed currency. When the war was over much of that currency went into the stock market and caused a bubble called the Roaring 20s. Inflation caused the bubble, the bubble is the disease, the cure is the bust. Without inflation the bubble would have never happened and the Great Depression would have never happened. If the gold-standard had not been suspended, WW1 would have ended much sooner because the governments would have gone bust. Governments would have had no reserves to finance their armies.
Posted on: Mon, 05 Jan 2015 22:17:20 +0000