Debt has the world trapped at low rates
The RBA didn't cut rates today but the market is betting it's only a matter of time.
The hiking cycle globally is over and that's with rates still at some of the lowest levels ever.
Martin Wolf looks at how we arrived in a world where inflation is dead and interest rates are stuck at rock bottom levels. His point about the long history of the BOE is particularly sobering.
Amazingly, prior to 2009, the Bank of England never lent to banks at a short-term rate below 2 per cent. That had been low enough to cope with the Napoleonic wars, two world wars and the Depression. Yet, for a decade its rate has been close to zero.
He makes the point that low rates are critical in a deleveraging but that a side effect if public anger and a rise in populism.
Read it here.
