The U.S. Federal Reserve has the cost of money within the banking system down to zero. And liquidity is its priority. The rest of the world’s central banks are on the same cheap money craze.
The bottom: It’s hard to call the ongoing central bank objectives successful.
The small U.S. investor is getting the short end of the stick. If he wants minimal risk, he is going to earn 1% or less for a reasonably, minimal-risk investment. This is well below the inflation rate reported by the U.S. government and far, far below the actual rate of inflation that’s never officially disclosed, except at the supermarket checkout counters.
The stock market is always iffy in a stagnating, inflation-prone atmosphere. More sophisticated investors can look to the corporate bond market, provided they are familiar with “duration” principles. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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