As Central Banks the World over commence another period of activist monetary policy, we appear to be moving back towards a World of ZIRP and NIRP. Respectfully, these are Zero Interest Rate and Negative Interest Rate Policies.
These are not times for complacency, nor fear, but instead careful assessment of the investment backdrop and how it is likely to evolve in the months ahead, with an ongoing focus on long-term strategic objectives.
What is the true cost of cheap money? Maybe the answer is wasted spending, or in economic speak, ‘misallocated capital’. This is where money is borrowed and spent on projects and ideas that otherwise would not pass the smell test when interest rates are considerably higher than they reside now.