The likes of Ruchir Sharma might wish the era of cheap money to be over. After all, their organisations exist to assist the ever upward flow of wealth in society, and high real interest rates greatly aid this process. The reality us, however, that falling interest rates are going to happen in 2023 and with inflation disappearing rates are likely to tumble in 2024. I doubt they will go below 1% again, but with deflation likely rates of well below 2% are very likely, and even essential.
How anyone can start shouting about high interest rates when real rates are currently, in sterling, perhaps minus 8%, is astonishing. And then to go on and say that 2% in a time of deflation would be low interest rates is alarming. Because of course that would be a positive real rate of interest.
Spud is trying to do interest rate analysis without distinguishing between real and nominal interest rates. That’s so stupid that it’s alarming even from him.