Maseratl wrote:
lol
Interest is a funny thing. It is the cost of a temporary and returning transfer of wealth, in the form of money.
If the wealth transferred is in a form other than that of money, it would be a rental fee.
So money is the representation of wealth that permits either exchange for another type of wealth, or alienation and repatriation (lending) for a fee (interest).
When you are "purchasing a bond", say a sovereign bond, you are alienating and subsequently repatriating the property, for a fee. (In the case of perpetual bonds you are instead exchanging it for an incorporeal form of wealth, namely some associated rights that may be vindicated and enforced by a legal system.)
Thus we often hear the idea that interest rates are "the price of money", i.e. the fee that you must pay for holding temporary title to the property that is money.
Remember that those bonds referenced in the article are all government bonds. The fact that they fall over time indicates to me that the money form of wealth may not be as valuable, relative to other forms of wealth, as it once was; that there are increasingly more avenues by which to secure that money other than from whomever controls the government of the day at any given time; that corruption and handouts by way of cut-rate lending have increased at the expense of public coffers, which difference is made up by increased taxation and deficits (you should find an overall tax burden in those same periods/jurisdictions and overlay it); that there is just so much more wealth recently than in the past that the marginal utility of each monetary unit--i.e. what someone might be able to achieve by borrowing it for a while--has continued to drop accordingly; etc.
In and of itself, the chart says nothing in particular, but it is stimulating.
Here's a question: If the interest rate drops to zero, does that mean that the marginal utility of money is zero? Has progress then ground to a halt, and churning all that remains? If so, then in a zero-interest-rate environment, all lending is, is the picking of winners and losers by allocation. Absolute gains vanish, so relative gains become the order of the day. Consider in this light that we no longer see the floating of all boats by a rising tide, and instead see the rich getting richer and the poor getting poorer. Relative gains directed to a few at the expense of the many, while the larger context is completely stagnant.
I could go on, but various regulars here are probably already slitting their wrists... I picture idiot sitting on the floor with his necktie already tied to the doorknob, agip breathing heavily into a paper bag, and Igy trying the nutmeg challenge.
An interesting take! I like it