Who is responsible for the low interest rate in the credit market?

Even if there were a glut of savings and the economy stagnated, the lending rate would by no means fall to or below zero without manipulation by the central banks. The consequence would instead be price deflation. But because this could cause our credit money system to collapse, the central banks will fight it with every means at their disposal.

If you ask central bankers the question about the reason for low interest rates, you get the answer that they could not be responsible for it. As a rule, monetary policy only influences the money market rate among banks. Even the purchases of bonds, which have become fashionable at central banks, are only a reaction to the anaemic development of the economy.

Please note: This study is available in German only.