"Science, though, is one thing, finance another. In science, progress is cumulative — we stand on the shoulders of giants. In finance, progress is cyclical — we keep stepping on the same rake" #QotD

"Science, though, is one thing, finance another. In science, progress is cumulative — we stand on the shoulders of giants. In finance, progress is cyclical — we keep stepping on the same rake...
    "Interest rates are probably the most sensitive and consequential prices in capitalism. They balance savings and investment, discount future cash flows, define investment hurdle rates, measure financial risk.
    "Yet the US Federal Reserve Bank [the Fed] and its foreign counterparts seek to manipulate or, at least, to influence, interest rates both long-term and short-. They can’t seem to keep their hands off them...
    "The artificially low rates of the past 10 years have advantaged investors, speculators and corporate promoters. They have deadened the risk sensors of even professional investors...
    "The same low rates—by some measures, the lowest in 3,000 years—have penalized savers, incentivized dubious risk-taking, expedited the growth in federal indebtedness, and perpetuated the lives of businesses that would have failed in the absence of easy credit. They have widened the gulf between rich and poor, thrown a spanner into our politics and inflated the cost of retirement...
    "The trouble is that the costs of radical monetary policy are dark and prospective; the gifts they bestow are bright and immediate. Those gifts are likewise transitory."
          ~ Jim Grant, from his oped 'Regime Change For the Fed — Honest Rates' 

[Hat tip Louis Boulanger]
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