Central banks’ zero-rate folly

By keeping interest rates near zero for over a decade, central banks have created profound economic insecurity and financial fragility.That’s the argument of financial historian Edward Chancellor, guest on the latest New Money Review podcast.Chancellor, author of a new book called ‘the Price of Time’, says that extremely low interest rates have caused unsustainable asset price inflation, including the recent bubbles in cryptocurrency and tech stocks.And near-zero rates, says Chancellor, are also largely responsible for the weak economic growth, rising inequality, zombie companies, elevated debt levels and the pensions crises that have afflicted the West in recent years.Listen to the podcast to hear Chancellor and New Money Review editor Paul Amery discuss:How low interest rates have created tensions in markets, the economy and societyThe ancient debate over whether money should pay interestWhy the lender at interest is ‘selling time’Enlightenment thinking, natural rights and interest on loansLow interest rates, credit bubbles, financial manias and crashesWhy John Law’s 1720 Mississippi scheme prefigured quantitative easingHow Ben Bernanke turned the Fed into the world’s largest hedge fundThe parallels between financial markets and complex natural systemsThe UK’s leveraged pension fund debacleWhy the lowest rates ever created the everything bubbleIceland’s post-2008 debt jubileeCapital controls and why financial globalisation is coming to an end