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2018-09-16

What costs nothing is worth nothing!

What costs nothing is worth nothing! As far as the General representation of price and value. This is since many centuries. Who wants to get a certain quality, must also pay a higher price for it. But how is it actually with money? Even money has a quality? And what will it cost then?

 

The price for money is simply the interest rate, which is paid for it. Because interest rates are nothing more than classic cost for the provision of liquidity. Need to borrow a debtor with good credit money, so he will need for the loan and less interest to pay, as a borrower with a worse credit. Since the onset of the financial crisis, this mechanism is disturbed in part.

What is this?

The Central banks, notably the FED and the ECB, have started to move to an ultra-liberal Central Bank policy. Thus, the drying up of the money market should be avoided. Because the banks have borrowed out of fear of negative messages to each other no more money. Then even as the state added to this was the problem of debt was exacerbated these effects. The result is that today the interest rate has lost its Risikoallokationsmaß. That the debtor to get with poor credit no money more in the money and capital market, however, 1:1 in the case of the Central banks. As a result, the risk selection is canceled. The ultra-low interest rates the cost of money is almost Zero.

But what is now with the originally-mentioned Theorem: What costs nothing is worth nothing? You can learn more in my new book: The greed for Gold.

Sources: article image: Michael Staudinger / pixelio.de; Interview: N24

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