Economics and Investing:
Five years of the Fed and Treasury Department’s forced Zero Interest Rate Policy (ZIRP) have badly distorted our economy, removing any pretense of a “free market.” All that we have left are markets on life support. With yields of less than 1/4 of 1%, passbook savings accounts are joke. Money market rates ranging from 0.40% to 0.85% aren’t much better. With ZIRP, local, state, and Federal government over-spending has had no serious consequences. But when rates eventually do spike, there will be a bloodbath. Bond yields are completely out of whack. Banks have been given unrealistically high reserves. So ZIRP …