Central banks in many large economies around the world are keeping interest rates really low, near zero in countries like the USA and Japan, in fact. Low interest rates are seen as the way to encourage economic growth by making borrowings cheaper.
To revive their sickly economies, the relevant countries’ low interest rates could be instrumental. However, as money would go to where it is treated best, a lot of this cheap money is finding its way to Asia. Although the USA would like to see inflation in their economy, their money printing has also caused inflation in Asian economies.
|Declining value of the US$. Source: Wikipedia.|
The low interest rate environment is hurting people who save. They get less interest income for their savings and they are also impacted by higher prices like everyone else. They are being paid less and forced to spend more! A double whammy!
Savers have to put …