The United States Federal Reserve made news last week by raising its benchmark interest rate. However, even if the Fed continues with modest hikes, globally, rates close to and even below zero are here to stay, especially in the eurozone. Some observers explain this unusual state of affairs by citing economic trends (long-term stagnation), while others blame monetary policy. Whatever the reason, the consequences for investment allocation, savings and political reform will be negative. European economies may end up in permanent sclerosis.
In the wake of the ‘Great Recession’ central banks around the world brought their policy rates close to zero, where they have remained for nearly sev...
