Antal Fekete Explains Money, Banking, The Global Financial Crisis, and Everything

Wonkish, but brilliant -- here's an example: ``You must distinguish between a low but steady interest rate regime that is salubrious and a falling interest rate regime that is lethal to the economy. I have just explained how falling interest rates make it impossible for businessmen to make sound investments. Actually the situation is far worse. Not only is capital formation inhibited, but on the top of that existing capital is endangered. Under a prolonged decline of interest rates capital is being eroded and, ultimately, destroyed. If this seems paradoxical, it is because of the reluctance of the mind to admit that a higher bond price represents a higher liquidation value of the underlying debt -- an obvious proposition. In other words, a fall in the rate of interest, far from alleviating the burden of debt, aggravates it.''