“The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30 percent of global government debt at negative yields, combined with quantitative easing on a massive scale,” Rothschild writes in the company’s semi-annual financial report.
The banker notes this policy has led to a rapid growth of stock markets – US stocks have grown threefold since 2008 – with investments growing and volatility remaining low.
However, the real sector of economy didn’t enjoy such a profit, as “growth remains anemic, with weak demand and deflation in many parts of the developed world,” according to Rothschild.
The greatest monetary experiment in history.
— StockTwits (@StockTwits) August 16, 2016
According to a Bank of America Merrill Lynch report in June, interest rates in developed countries, in particular America’s 0.5 percent, are now at the lowest level in 5,000 years. In their battle against deflation, countries such as Sweden, Switzerland or Japan have even turned to negative key lending rates.
Interest rates are the lowest in 5000 years! One strong reason to be a net net investor. pic.twitter.com/99M6cd0XJl
— Evan Bleker (@netnethunter) July 25, 2016
Gross: Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day
— Janus Capital (@JanusCapital) June 9, 2016