David Stockman on Bloomberg on the impact of low interest rates:
You shouldn’t be pegging the money market rate. That is a false function. It doesn’t work in a world that’s drowning in debt. The only reason to peg the interest rate below the market is if you’re trying to encourage businesses and households to borrow. Businesses in America have all the debt they’ll ever need and they’re spending it to buy back their own stock. Households are at peak debt. Ninety percent of households can’t borrow more if they wanted to. So the only thing that zero interest rates do is create a tremendous subsidy, a tremendous incentive for Wall Street to gamble more and more recklessly.