Part of the Keynesian disease, a big part, is the fetish for low rates of interest. Not everyone now necessarily thinks so. This is from the Bank for International Settlements:
The international body representing central banks is warning its members that record low interest rates are generating conditions for another global financial crisis that may be worse than the first.
In its annual report, the Swiss-based Bank for International Settlements (BIS) expressed serious concern that global share markets had reached new highs and the interest rate premium for many risky loans had fallen.
“Overall, it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally,” the bank wrote.
The BIS says the disconnect is largely due to continued monetary stimulus in the form of money printing and record low interest rates by many developed economy central banks.
Why interest rates too low are a problem is hardly obvious and is hardly taught. Very clear from reading the pre-Keynesian literature but who reads any of that now. But the BIS is sending out the clearest possible warning but is it even possible that anyone at the heights of our political establishment would either understand or act on this advice.
(With thanks to Julie for sending the link along.)