A Quote by Mohamed El-Erian
If you happen to be the only one with negative interest rates, you also weaken your currency, which means you make your exports more competitive.
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A strong currency means that American consumers and businesses can buy imported goods and services more cheaply and that inflation and interest rates will be lower, ... It also puts pressure on American industry to increase productivity and competitiveness. These benefits can feed on themselves as foreign capital flows in more readily because of greater confidence in our currency. A weak dollar would have the contrary effects.
How long can interest rates stay negative? Think about this. Not only are you lending your money to governments, but you're paying them interest for the privilege of doing so.
The only reason you would want your currency to fall, if you could control it, is in order to get more exports.
China got the local currency, the yuan which is appreciating against the dollar which means that all these Chinese people have more purchasing power. And they're willing now to spend some money after saving, you know they provided America with savings for years. Now they're going to spend some money. So this means that they are willing to allow the dollar to weaken because it means that their currency, the yuan goes up, so they're actually in a winning situation.
With interest rates rising, gold doesn't pay an interest rate, but every other currency - it becomes not only less important to hold gold as an alternative, but more expensive to hold it as an insurance policy and so that will be a burden on the price of gold.
There is no self-interest completely unrelated to others' interests. Due to the fundamental interconnectedness which lies at the heart of reality, your interest is also my interest. From this it becomes clear that "my" interest and "your" interest are intimately connected. In a deep sense, they converge.
Credit card companies are jacking up interest rates, lowering credit limits, and closing accounts - and people who have made timely payments are not exempt. So even if you pay off your balance - and that's tough when interest rates are insanely high - there's a good chance your credit limit will be slashed, and that will hurt your FICO score.
I mean, I'm a conservative. I believe that, you know, if you borrow too much, you just build up debts for your children to pay off. You put pressure on interest rates. You put at risk your economy. That's the case in Britain. We're not a reserve currency, so we need to get on and deal with this issue.
If you become so frightened of realities that are not your own, if you take upon yourselves tragedies that do not exist in your reality, in your moment, then you weaken your position and weaken the position, of those you think you are helping. You look about you and you see only hopelessness and helplessness. You organize your reality according to the tragedies of the newspapers!
Number of things happen after I was 50. One, you are hopefully secure in what you want to do - which means that you don't spend a lot of time chewing on your knuckles about your reason for being here.Also, you're at your most beautiful. No woman is ever more beautiful than she is at 50.
The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest rate, but on other interest rates as well.
For people who grew up in the last four decades of the 20th century, it is hard to grasp the concept of negative interest rates. How is it even possible? If interest rates are the price of money, is the marketplace broadcasting that money is on sale? Are we just giving it away?
In Germany, college tuition is free. In America, college tuition is increasingly unaffordable. In a highly competitive global economy, which country do you think will have the best educated work force and a competitive advantage? We must make tuition free in public colleges and universities and substantially reduce interest rates on student loans.
The underlying strategy of the Fed is to tell people, "Do you want your money to lose value in the bank, or do you want to put it in the stock market?" They're trying to push money into the stock market, into hedge funds, to temporarily bid up prices. Then, all of a sudden, the Fed can raise interest rates, let the stock market prices collapse and the people will lose even more in the stock market than they would have by the negative interest rates in the bank. So it's a pro-Wall Street financial engineering gimmick.
You cannot help the world by focusing on the negative things. As you focus on the world's negative events, you not only add to them, but you also bring more negative things into your own life.
Politics now is really only about self-interest, which means it has violence built into it because your self-interest is going to collide with the self-interest of the rest of the world. That's inevitable.
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