As I was attempting to dry off from the torrential rainfall occurring in Chicago this AM, I had this thought: Why are interest rates so low?
Are the Granthams and Grosses of the world correct in their deflation scenarios?
Let’s look at all the reasons for low rates.
Some are stand alone, some are related:
1. Slow or decelerating European and US economic growth.
2. European sovereign debt crisis.
3. European bank crisis.
4. China tightening to contain inflation.
5. No or slow demand for money.