Aug. 21, 2019, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement responding to President Donald Trump’s tweet on negative interest rates where he wrote, “So Germany is paying Zero interest and is actually being paid to borrow money, while the U.S., a far stronger and more important credit, is paying interest and just stopped (I hope!) Quantitative Tightening. Strongest Dollar in History, very tough on exports. No Inflation!………WHERE IS THE FEDERAL RESERVE?”:
“Negative interest rates signal the death of capitalism because they will mean we’re in a deflationary cycle, where it makes more sense to put money under your mattress than to invest in growing businesses, buying bonds and creating wealth. Capitalism depends on capital formation, and that only occurs when there is a profit to be made for risk-taking. If we’re projecting no inflation, that also means no growth, as Japan has learned for the past 20 years. Instead of conceding to negative rates and deflation and no growth, we need to offset what China and other countries are doing on currency to devalue the yuan and other currencies versus the dollar so that we’re not destroying incentives in our own economy. Negative rates threaten the U.S. economy, they are no panacea. Just ask Germany and Japan about their growth rates.”
Attachments:
“Why we should be worried about Alan Greenspan’s negative interest rate prediction. It might mean the end of capitalism.” By Robert Romano, Aug. 16, 2019 at http://dailytorch.com/2019/08/why-we-should-be-worried-about-alan-greenspans-negative-interest-rate-prediction-it-might-mean-the-end-of-capitalism/
Interview Availability: Please contact Americans for Limited Government at 703-383-0880 ext. 1 or at media@limitgov.org.
###