Russia Cuts Interest Rates Whilst Maintaining Tough Monetary Policy

Tyler Durden's picture

Submitted by Alexander Mercouris of The Duran

The Russian Central Bank has, as predicted, cut its key rate from 10.5% to 10%.

This is consistent with the continuing rapid fall in inflation.  With inflation zero in the first two weeks of September after being zero in the last week of July and through most of August, its annualised rate is now just 6.6%.  The Central Bank has said that it intends to keep its key rate 3% above the annualised rate of inflation for the foreseeable future, so that with annualised inflation running at 6.7% it had the space to announce this rate cut.

However that is where the good news stops.  The Central Bank has signalled that it intends no more cuts to its key rate this year, meaning that the earliest possible date for a further rate cut will not be before January next year.  The Central Bank also says that it will maintain what it calls its “moderately tight monetary policy” – a policy which is in fact giving Russia the highest real interest rates of any major economy in the world – throughout 2017 and indeed beyond.

Here in its own words is the Central Bank’s guidance from its own press release

“On 16 September 2016, the Bank of Russia Board of Directors decided to reduce the key rate from 10.50 to 10.00% p.a. given the inflation slowdown, in line with the forecast, decrease in inflation expectations and unstable economic activity. However, for the trend towards sustainable decline in inflation to strengthen, according to the Bank of Russia’s estimates, the current value of the key rate needs to be maintained till end-2016 with its further possible cuts in 2017 Q1-Q2. Considering the decision made and persistent moderately tight monetary policy, the annual consumer price growth will stand at 4.5% in September 2017 and will then go down to the 4% target in late 2017. When making its key rate decisions in the coming months, the Bank of Russia will assess inflation risks alongside economy and inflation dynamics’ consistence with the baseline forecast.”

The Central Bank admits the market is expecting cuts in the key rate to take place faster, and it even brags that it intends to cut its key rate more slowly than the market expects. 

Its rationale is that the market still expects inflation at the end of next year to be higher than 4%, which is the Central Bank’s target.  However the Central Bank says it is determined, come what may, to achieve its target, which is why it is going to keep its key rate higher than the market expects

“The Bank of Russia expects that the decision made and maintenance of the key rate at the level it reached will bring down inflation expectations. At present, the structure of market interest rates by maturity and survey findings indicate that, in contrast to the Bank of Russia, market players forecast a faster drop in interest rates. Additionally, their end-2017 inflation forecasts exceed the 4% target of the central bank. In reality, the decrease of nominal rates has a limited capacity, and the economy will maintain moderately tight monetary conditions for quite a long period of time. This is implied by the need to keep positive real interest rates at the level supporting demand for credit that does not raise inflationary pressure and keeps incentives for saving.”

In what is the single most extraordinary paragraph in the entire press release, the Central Bank admits that Russia will only achieve 1% growth next year, but denies that this has anything to do with its “moderately tight monetary policy”

“Persistent revival in production activity is still unstable and patchy across industries and regions. According to Bank of Russia estimates, the moderately tight monetary conditions do not hamper recovery in economy, whereas the main obstacles are caused by structural effects. The labour market tries to adjust to new economic conditions, and the unemployment remains stable and low. Import substitution steps up and non-commodity exports expand for certain items. Industry, including technology-intensive production types, discovers new opportunities for growth. Nonetheless, they fail to ensure an overall robust positive production dynamics. At the same time, certain industries stagnate or show slowdown in output growth, while investment continues to contract. More time is needed for positive trends to develop and get rooted.”

(bold italics added)

This is a fantastic claim, and by making it the Central Bank undermines its own credibility.  Quite simply, it is absurd to say that high real interest rates – currently the highest real interest rates of any major economy in the world – are not going to impact on growth. 

Moreover the Guidelines the Central Bank published in November last year explaining its monetary policy shows that the Central Bank is fully aware of the fact.  As the Central Bank knows the reason output is struggling to rise is because of low rates of consumption and falling investment. 

The Central Bank’s press statement actually refers to the fact that “investment continues to contract” (see above).  This is what the Central Bank said in its Guidelines about the effect of interest rates on levels of consumption, investment and inflation

“All things being equal, a downturn in interest rates stimulates lending, helps increase consumption, and leads to investment growth, but inflationary pressure can also increase. By contrast, high interest rates contribute to growth in savings and constrain lending and investment activity, but reduce inflationary pressure.”

(bold italics added)

Yet the Central Bank would have us believe that the high interest rates it is imposing, which in its Guidelines it admits “all things being equal” cause consumption and investment to fall, are not the reason why in Russia consumption and investment are continuing to fall!

What is little understood – and is scarcely ever said – about the present state of Russia’s economy is that though the underlying rate of inflation is now running at 5-6%, which is below its pre-devaluation level, interest rates are higher than they were before the devaluation, and that despite the recent cuts in the Central Bank’s key rate real interest rates in Russia are actually rising. 

This chart shows movements in the Central Bank’s key rate since 2013, the year in which Nabiullina was appointed Chairman of the Central Bank

In 2013, at the time Nabiullina took over as Chairman of the Central Bank, and before she started raising interest rates in 2014, the Central Bank’s key rate was below 6% in a year when annual inflation was 6.48%.  Today she intends to hold the key rate at 10% despite the government’s forecast that inflation this year will be 5.7-5.9%.

Annual inflation in Russia was in double figures in every single year post 1991 up to the crisis year of 2009 save for 2006, when it briefly dipped to 9.02%.  Inflation was in double figures throughout the period 1998 to 2008, when Russia was regularly achieving annual growth rates of 7% and more.

Inflation fell from double figures to single figures in 2009, and has been in single figures ever since save for the brief period of the inflation spike of 2014 to 2015, which was caused by the one-off factor of the devaluation of the rouble in 2014, which caused inflation to rise back into double figures in 2014 and 2015.

This period of single figure inflation since 2009 is the same period during which Russia’s growth rate has fallen from the annual rate of 7% it was achieving before the 2008 crisis to 4.3% in 2011, 3.5% in 2012, and 1.3% in 2013.

In other words there is a direct correlation between the decline in Russia’s growth rate post 2008, and the fall in inflation which has taken place since then – and the rise in interest rates which has happened to achieve it. 

To see how see this World Bank graph which shows movements of real as opposed to nominal interest rates in Russia since 1991.

Russia experienced negative real interest rates from the 1998 crisis until the 2008 crisis.  During the period of the 2008 crisis real interest rates briefly surged into high positive territory as part of the government’s anti-crisis measures.

They then fell back again into negative territory directly after the 2008 crisis was overcome as the Central Bank and the government looked for ways to support the recovery.  However since 2011, as the Central Bank and the government have become more focused on inflation reduction, they have been rising steadily, turning positive in 2012, and remaining positive ever since, even during the period of the 2014-2015 inflation spike when they might have been expected to go negative.

Since the end of the inflation spike in mid 2015, and despite the round of key rate cuts Nabiullina has announced since January 2015, they have been rising again.

Prior to 2008 high growth was the priority, causing the Central Bank to keep real interest rates negative and to increase the money supply in order to sustain growth and to prevent over-rapid appreciation of the rouble in conditions of rising oil prices.  The result was double digit inflation in every year between 1998 and 2008, apart from the brief dip in 2006. 

Since recovery from the 2008-2009 crisis the priority has been inflation reduction, with monetary policy being tightened steadily in order to choke off inflation.  The result is that inflation fell into single figures after 2009, and apart from the short period of the 2014-2015 inflation spike has remained so ever since, and is now falling further.   

Since Nabiullina became Chairman the Central Bank has taken the policy a whole step further, tightening monetary policy even more, so that it is now significantly tighter than it was even during the post-recovery period of 2011-2013 and before the 2014 devaluation, despite the fact that inflation is now actually below the level it was in that period.

In other words Nabiullina and the Central Bank – and indeed the whole government – are using the 2014-2015 inflation spike to give themselves political cover to carry out a policy of monetary tightening the likes of which post-Soviet Russia has not seen since Putin became President.  This objective is to bring inflation down to 4% by late 2017 in order to achieve the long term results I discussed in my previous article

As for the famous ‘structural factors’ about which we hear so much, the Central Bank’s latest press release shows what they really are: an alibi conjured up by the Central Bank and the government so they can pretend that the sharp fall in the economy’s growth rate caused by their own anti-inflation policy and the high real interest rates they are imposing has nothing to do with them. 

That is unless inflation is the ‘structural factor’ which they see as limiting growth in the long term – something which it might be reasonable to say, but which for some reason no-one ever does.

In truth the wonder is that despite interest rates being so high there is any growth in the Russian economy at all, especially as there is no countervailing fiscal stimulus from the budget to offset Nabiullina’s “moderately tight monetary policy”. 

On the contrary – and though you would never know it from the way some people talk – since the start of the recession budget spending has actually been cut, so that coming out of recession Russia’s federal budget deficit in the first 8 months of this year was just 2.9% of GDP.

There are of course many people who find this policy approach commendable.  Reducing inflation to 4% is a worthy aim, and over time it may – and indeed probably will – achieve the good results people like Nabiullina and Kudrin say it will.  I must however say that I can think of no other Central Bank or government in any other G20 economy which in the same conditions would behave in this way. 

At a time when Russia has suffered a recession any other G20 Central Bank or government finding itself in such a position would surely focus on ending the recession, not on further reducing inflation from what is by Russian standards an already historically low level. 

This would be especially so given that the moderate loosening of monetary policy this would call for would be most unlikely to compromise the anti-inflation policy in any serious way.  At worst it might delay achievement of the 4% by a few months, or perhaps a year.

Russia however is different.  With unemployment very low at 5.7% at a time when the country’s labour force participation rate is at an unprecedentedly high 70%, and with political and macroeconomic conditions stable, the Central Bank and the government obviously feel they have the political and economic space to see the policy through, and it seems they are determined to see it through come what may.   Not for nothing is Nabiullina being called “the most orthodox Central Banker in Europe”. 

As for Putin, as I said in my previous article I have no doubt he supports the policy.  With the political situation in Russia stable and his popularity at stratospheric levels, he is moreover under no real pressure to change it.  If only for that reason I don’t expect the policy to change.

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Belrev's picture

In Russia nobody cares about interest rates. Very little borrowing and stock market does not ring a bell. It is more of a real economy, cash based.

Want to buy a house, bring a bag of cash, same for cars and other items that in other countries are normally payed for by non-cash means.

Many people produce their own food on land lots outside of cities and do their own house repairs and car repairs while heating their homes with wood and hauling water from wells. None of it is accounted for in GDP calculations.

Businesses pay salaries when receipts come in, so not getting payed your salary on time is a norm, short term business loans are not heard off like in US for instance.

You can keep your money in a bank at 10-15% interest rate, but you run a risk of losing half of it like in 2015 when Ruble collapsed by 50% to USD.

earleflorida's picture

I like it.

Bring cash,... as in.king!

You go vlad:)

10mm's picture

Cash is King. With a hot chick. 

Escrava Isaura's picture

By reading your post one’s would conclude that in Russia there are two Russias.

One is the Empire (financialization and usury).

The other is self-sufficiency by  remain smaller “owning their own commerce’s”. It sounds a lot like Brazil in the 1960’s and 70’s.

But in the 1980’s Brazil embraced US neoliberal policies: Change to capitalism.

If I had to guess, Brazil will collapse while Russia will survive.


The central planners's picture

Whats wrong with capitalism?? Btw Russia is capitalist otherwise it wouldnt survive like Venezuela.

Escrava Isaura's picture

Capitalism is unsustainable. Commerce is post financial collapse.

You’re correct, Communism is super capitalism; so communism also won't survive.

Self-sufficiency distributed/shared by local commerce is the only system that can survive post financial collapse.

But, once the energy grids (oil and electricity) are gone, most local commerce will collapse as well.

So, if you want to survive post financial and energy collapses, Amish are the ones to be looked at.


Venezuela, make that all oil producers, are in trouble right now because of the price of oil. The price to produce oil keep going higher while the consumers are too broke too pay higher prices. Also, not only Venezuela doesn’t have THE global reserve currency, They cannot set the price of their oil that they need to break even, because their oil is sold in a currency that is outside their jurisdiction —their law. So, they’re trapped.


Anyway, once their oil is gone, and very soon, because most will have to come from tar sands, go back to my first paragraph.


silverer's picture

Capitalism is sustainable until you form a government.

Consuelo's picture





For searing brevity and Bang-on insight.



The central planners's picture

I think the number one threat to capitslism its popular monetary policy/history illeteracy thats gives bankers/gov huge leverage to deceive people and then blame capitalism.

ZD1's picture

Venezuela's oil industry is in trouble because it was nationalized and looted by Hugo Chavez and his socialist cronies.



adanata's picture


Free enterprise baby... it's the only way the human animal has ever or will ever function and succeed. You take your "sharing and redistribution" under a central planning "authority" to a galaxy far, far away... and stay there.

RedDwarf's picture

"Self-sufficiency distributed/shared by local commerce is the only system that can survive post financial collapse."

"distributed/shared" and "local commerce" are mutually exclusive statements.  You're spouting gibberish.

AVmaster's picture


The banking cartel will never be able to crack the russian nut.


If hillary becomes pres im moving to russia...




Ramesees's picture

Jesus the Russio-philes that infest this site are out of control.  Assuming you're not a paid Putin troll, toiling away in some basement in St Petersburg, why don't you go try to live in Russia?  It's a freaking 3rd world hellhole (and by the way, it's been like that since before the tsars).  It's the Africa of the northern hemisphere. 



silverer's picture

You are right about some of what you state. However, the real question is a question of what is sustainable. I know there are outhouses as soon as you drive out of Moscow. But look at what the US faces long term. Russia won't have the bill the US has to replace hundreds of billions of dollars in infrastructure that the US has ignored for decades. They also are not drowning in debt like the US. Russia is presently sustainable. So if you want to borrow from tomorrow to live for today, you get flushing toilets and $50K dollar cars. But who will still be chugging along 15 years from now pretty much status quo is the real question. Plus one for your post. Thanks.

Ramesees's picture

Russia's demographic death spiral has already begun - the population of Russia is *declining*.  That means that fewer and fewer Russians are available to produce and consume goods each year.  This is what makes an economy unsustainable.

Playing games with the soundness of the currency (which is what the US is doing) is unsustainable, but at the end of the day, 320million + 3% each year in the US needs goods and services, so though the currency may devalue, economic activity in the US will not.

SixIsNinE's picture


according to the above link, US Dept of Homeland Security says that the USA greets approximately 500,000 immigrants each year.

This is how our population #s keep going up.  All about getting another tax-slave into the system, boost the rentier class.

Russia being a much more homogenous group of people versus a rapidly increasing hodge-podge of people fed a diet of propaganda similar to what we used to criticize the USSR for. 

Half a million a year, eh DHS ?    russia's got the new railroads to china  ...


rejected's picture

How long have you lived there? 


Consuelo's picture



Cheap shots and pejoratives aside for a moment...


Somehow Russia makes it though, do they not...?


Enough so to challenge - and perhaps even overtake, the AIPAC-Con hegemon.   Amazing, no?   Since the Matzo-banker led pillage of their country during Yeltsin's reign of drunkenness, to the present.   Like a soft piece of steel being heated, pounded, and quenched repeatedly.  

We're not all pining to move to Russia.  We're simply pointing at truths that some here simply can't handle.





fbazzrea's picture

It's the Africa of the northern hemisphere.


are you referring to the Africans' general lack of access to technology? consumerism? materialism? what about their family values? morals? work ethic? would you carry drinking water miles each day? as America recedes into a third-world country post-crash i hope we have the tenacity and strenth to overcome the hardships with as much character and grace as the typical African.

i read an interview with Putin where he said something to the effect that why would Russia want to expand more territory? their nation stretches across 16 time zones, ranked 97th in population density ahead of Australia, Canada and Kazakhstan. acquiring more land is not on their agenda. they simply want to join the world's trading partners without being vilified and economically punished by a Western regime bent on world domination.

and for the record, i'm not a paid Putin troll. i live in Oklahoma. we remember the Dust Bowl, the Great Depression, basically, a 3rd world hellhole. these things were outside our control as we lived in squalor and poverty. it did not make us bad people. it made us better. we appreciate what we have. do you?

judging an entire nation by their people's suffering is beyond my comprehension. judging a government responsible is another issue.



silverer's picture

I keep telling people that Russia is in much better shape than the mainstream lying press would have you believe. First of all, their stock market outperformed the rest of the planet, article was here on ZH about that. Secondly, look at the debt to GDP. Compare Russia to the US. Which country will look like Venezuela in five years? One other thing Russia does that is smart. The vast majority of its debt is held internally. For the US, the whole planet holds its debt. Who has more control? Especially if the world starts to doubt the safety of the dollar?

Ramesees's picture

China, the largest foreign government holder of US Treasury Bonds and Bills, pegs their currency's value to a basket of currencies including the dollar - they are thereby forced to purchase dollars in order to peg their currency's value and keep their currency relatively weak against the dollar.  This explains part of China's large ownership of UST.  

As to which country has more of a chance looking like Venezuela in the next five years?  Well, neither, really, but in the near term Russia's outlook is much, much worse than the US's.

Unfortunately, I think Putin knows this and plans to start a World War to try to even the playing field by forcing the US to defend its NATO allies when he annexes his next piece of "clay".  

white horse's picture

Yeah, Putin plans to start World War by putting bases all around US. Are you for real?

SofaPapa's picture

Backing up what White Horse is saying, this meme you are playing of "Putin is going to start World War" is completely backward from simple geography.  Where is there war in the world right now?  Who is defending, and who is attempting conquest?  

Russia's behavior supports their rhetoric.  The government - which goes beyond Putin, though he is undeniably the dominant figure in it - has said for years that they envision a multi-polar world where powers exercise control in their neighborhoods and interact where beneficial, on the basis of mutual self-interest.  Russia's actions in Ukraine, Georgia, and Syria are in their neighborhood.  They deal with ISIS because Islamic terrorism will naturally enter into Russian territory (Chechnya in particular), and they act to stop that.  Every move I have seen by Russia has been fundamentally defensive.  The idea that Russia would not annex Crimea after a hostile government enters power in Ukraine is historically ludicrous.  Russia has used that warm water port for centuries, and no Russian government would ever let it fall into hostile hands.  That goes way beyond Putin.

Let's look at the west now... The United States and its allies have now methodically, over the period of 15 years, destroyed three formerly functional societies in the middle East - Iraq, Libya, and Syria.  Did any of those three societies pose a direct threat to the security of the population of the United States before the US destroyed their institutions?  They were not ideal.  They were not democratic.  No argument there.  But they were a hell of a lot more stable and functional then than they are now!  People could basically live there.  Now they are unlivable, with their populations desperately (and rationally) trying to get to Europe in an attempt to find some peace relative to the Hell they are leaving behind.  Are you going to argue that is not the consequence of United States led "regime change" in those areas?

So then the US takes this game plan and moves to Ukraine.  What did you hear Victoria Nuland say in her taped conversation?  I heard her planning the installation of a NATO- and US-friendly regime in Ukraine.  This is the same NATO which continues to build hostile military capability on Russia's border.  If I were in Russia, yeah... I'd feel more than a little concerned about my safety from external invasion.

"Forcing the US to defend its NATO allies..."?  Who is acting aggressively, and who is defending themselves?  Again, this is based on geography.  Just what the hell is the US defending?  They seem to be advancing a whole lot more than defending.

Your argument flies in the face of common sense.  I'll trust my common sense, thank you very much.

Librarian's picture

"Forcing the US to defend its NATO allies..."

Kind of like how the US is forced to defend Turkey and Philippines, I guess. (yes, I know the 12 member countries of NATO but this analogy applies beyond NATO)

Suppose you start feeding a stray dog off your porch which then tries to attack you and your kids every time you come and go and then shits all over your yard and especially right outside your door.

Is the next logical step really to buy that dog the best dog food money can buy and then to bring him inside your house?

And then to blame Putin?

Tiritmenhrta's picture

"Putin knows this and plans to start a World War"

well, you really have a "clear picture" of this world...

I can only say, "keep on dreamin'..."

I Feel a little Qeasy's picture

This part,  'but you run a risk of losing half of it like in 2015 when Ruble collapsed by 50% to USD.' is bullshit because russians do not buy their purchases with USD.

Lumberjack's picture

Published this morning:


WikiLeaks - The US strategy to create a new global legal and economic system: TPP, TTIP, TISA.

jm's picture

Wow. A world engaged in trading with each other rather than preserving protective enclaves for TPTB. A common commercial code that has withstood the test of time and has evolved with changing states of the world.

This is a seriously evil plan.

Generic Property's picture

Published this morning one year ago.

Lumberjack's picture

My bad, it was put up on WL twitter this am....sorry.

Kagemusho's picture

Perhaps they are waiting for China to make its move regarding the announcement of its gold holdings, in anticipation of the Ruble riding The Yuan's coat-tails upward in value? Considering Russia's own massive gold reserves, any pain the Russians are feeling now might be immediately relieved with a rocketing increase in currency value.  So the Russian CB just might be able to weather this pinch in expectation of a windfall in the future(?).

GardenWeasel's picture

Apparently this author is not aware that the USA had its most prosperous era during times of higher interest rates.  Do these people not know how to read??

Escrava Isaura's picture

You’re correct, interest rates lags growth.

Growth has to do with credit. No credit, no growth.

Of course, unless you change the money system.


truthgiver's picture

Escrava, you seem to dislike both Communism and Capitalism.  Can you tell us what 'system' or society you believe works?  Is it a non-governmental, small society system?  Anarchy?  Not sure what you believe.

Librarian's picture

What he is saying is actually text book definitions.

Here are my own notes:

Leading indicators predict change prior to large economic adjustments.

Lagging indicators show up only after economic change and are used to verify the prescence or absence of an economic trend.

Leading Indicators

1. Stock Market

Caveats:  Easily manipulated by flawed earnings estimates, QE, POMO auctions, and other undisclosed gov stimulus.

2. Manufacturing

Caveat:  This assumes that goods don't then sit unsold as inventory.

3. Inventory Levels

Caveat:  Doesn't show new or old inventory.  High inventory levels can mean either increased demand or also a lack of demand.

4. Retail Sales

Caveat:  Doesn’t account for how people pay.  Not positive if consumers go into debt to finance their purchases.

5. Building Permits

Caveat: Real estate bubbles.

6. Housing Market

Declines decrease homeowner wealth, decrease new home construction, slow refinancing and selling and increase the risk of foreclosure

7. Number of New Business Startups

Smaller businesses hire more employees and pay more taxes, which adds more to GDP than large corps.


Lagging Indicators

Lagging indicators show up only after the economy changes and are used to verify the prescence or absence of an economic trend.

1. GDP

Caveats: can be skewed by QE and excessive government spending. Government only considers a GDP drop for 2+ quarters to be a recession.

2. Income and Wages

A good economy shows regular wage increases.  a declining economy shows layoffs, bankruptcies and pay cuts for any new workers hired after layoffs

3. Unemployment Rate

Caveats:  Gov considers part-time identical to full-time work.  Definitions likely understate unemployment.

4. Consumer Price Index (Inflation)

Caveats:  CPI can be manipulated by measuring prices of only certain goods.

5. Dollar Strength

Caveats:  Strengthening dollar can make debt repayments more difficult.  Weaker dollar promotes competition by increasing US exports which promotes job growth.  See also, 'beggar thy neighbor'

6. Interest Rates

Caveats:  This means only FOMC rates which can be manipulated by QE and other targeted Gov capital infusions to the big banks.

7. Corporate Profits

Caveats:  Can be manipulated to show positive as a result of excessive outsourcing and downsizing

8. Balance of Trade

Caveats:  trade deficits equaling dollar devaluation isn't directly correlated, it assumes direct economic health/parity of the trading partner.

9. Commodity Substitutes to US Dollar

PM not directly correlated due to "paper" trading of PM.  Subject to QE manipulation.  See POMO auctions.

commie's picture
commie (not verified) Sep 18, 2016 8:57 AM

Yep, things are comming up roses in Mother Russia.

Volkodav's picture

better worry about your country...

Librarian's picture

I think people are waking up to the incredibility of major news sources.

It seems that the goal is to give the reader the impression that Russia is a very weak country.

The next question is who is trying to give that impression and for what purposes?

RawPawg's picture

Pricing in Next Weeks FOMC Outcome

In.Sip.ient's picture

Quite simply, it is absurd to say that high real interest rates – currently the highest real interest rates of any major economy in the world – are not going to impact on growth.


Errrmmm... in what way "sparky"???


We have ZIRP and growth is about the same as Russia's...

OTOH, given that something called "capital accumulation"

( you call it "high interest rates" ) means that investment

will pull Russia ahead before ZIRP does anything for us,

doing the opposite of what the FED is doing might

be a good "contrarian" bet.

rejected's picture

Better, Zombie, non productive companies won't survive in Russia like that are in the West and u.s in particular.

10mm's picture

Hey,BTW,how's  the Muslim  envaders  going in Russia,or China? 

Omega_Man's picture

interest rates in USA should really be around 15%

silverer's picture

That would certainly shake out the dead wood.

rejected's picture

The actual inflation is closer to 10% than 1%. A 15% interest rate would boil down to a 4-5% real rate which has been the average before the latest BS ZIRP and worse NIRP.

What say you?