What Effect a 0% Base Rate?
Discussion
This came up in another thread and I am curious. What are your opinions on what a base rate of 0% would achieve.
There was commentary in the papers from some "experts" saying this had to be considered to save the economy.
Now quite often, people will site that 0% rates did nothing to save Japan and I cant help but disagree. (willing to have why I'm wrong explained to me btw).
The way I see it, Japan had a property disaster. Even with our vastly inflated market, it probably still isnt as crazy as prices went over there, and granted, the 0% (or close to it) rates didnt save the property market. But looking outside of property ownership, they're still able to have a sucessful manufacturing industry in Japan and have a financial sector and service sector. They have maintained their position within the global economic powers despite the property crash.
The massive de-leveraging also seems to have made it clear to them the importance of only borrowing when you need to, as I understand businesses in Japan tend to be cash rich and finance far, far less than over here.
So aside from pasting savings rates, would a 0% base rate really be that bad a thing?
There was commentary in the papers from some "experts" saying this had to be considered to save the economy.
Now quite often, people will site that 0% rates did nothing to save Japan and I cant help but disagree. (willing to have why I'm wrong explained to me btw).
The way I see it, Japan had a property disaster. Even with our vastly inflated market, it probably still isnt as crazy as prices went over there, and granted, the 0% (or close to it) rates didnt save the property market. But looking outside of property ownership, they're still able to have a sucessful manufacturing industry in Japan and have a financial sector and service sector. They have maintained their position within the global economic powers despite the property crash.
The massive de-leveraging also seems to have made it clear to them the importance of only borrowing when you need to, as I understand businesses in Japan tend to be cash rich and finance far, far less than over here.
So aside from pasting savings rates, would a 0% base rate really be that bad a thing?
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