Over the weekend, the G20 met to discuss cheap money. Interest rates have been at record low levels for periods of over a year and show no sign of increasing. These low interest rates, in an effort to defer recession, have been continued on in an attempt to restore the economy.
So far this has shown some positive gains, and the manipulation of monetary policy has saved thousands of jobs and has kept the economy from imploding.
How long can we have cheap money for? As long as the inflation rate is kept lower than the interest rates, then the interests rates can be kept at these low levels. However, once enough money has been returned to the marketplace, then interest rates will begin to go higher.
Unfortunately, while interest rates remain low, you may see your pay check staying the same or decreasing over the next few years.
When will the economy finally recover?
Unfortunately, the G20 said they need to continue to keep interest rates low to stimulate the economy. This is a bad sign for many; however, enjoy the cheap money while you can, someday it will be gone soon it will be gone.
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