Low Interest Rates Encourage Bubbles

The Federal Reserve’s decision to maintain a 0% – 0.25% prime interest rate is not in the best interests of our economy. The historically low interest rates of the past decade have undoubtedly encouraged risky ‘investments’ of capital into real estate and other financial instruments in order to profit from an economy where keeping money in the bank will by the forces of inflation bite away at the purchasing power of the stored liquid assets. Not only that, but also the low interest rates were a catalyst for the pressure on prices of commodities via futures trading and general speculation.