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リチャード M.ナッシュRichard M. Nash

Does Abnormal Become Normal Over Time?

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公開日:2021年2月8日

     As someone who has been involved in the financial services and real estate industries for many years, I cannot help but find the current economic situation quite strange.  I have once worked in the Fixed Income Division of a major Wall Street investment bank, so I am probably more familiar than most people about interest rates and how they work.  So, when the zero-interest rate policy was pursued for a long time, and, then, negative interest rate policy was introduced to the market 5 years ago, I was totally surprised by its sheer abnormality.  The frightening thing, however, is that, before I even realized it, I have allowed myself to view this abnormal situation as something normal over this long period of time.

     The Bank of Japan (BOJ) not only introduced negative interest rates but also introduced quantitative easing and purchase of financial securities as part of their game plan to bolster the weak economy.  To put it in easy, but sarcastic, terms, the BOJ is creating money out of thin air and scattering it in the financial markets in wild abandon.  To boot, owing to the corona pandemic-induced economic crisis, these policies have been further enhanced.  The stock market has now risen to levels that fundamentals cannot explain.  Not only the stock market but also the real estate market has been supported by BOJ policies.  It is true that we now hear professionals starting to utter the words “asset bubble” in opinion pieces. 

     In any event, one has to wonder how this wild global party where central bankers around the world are serving the devilishly delicious cocktail of low interest rates, easy money, and price supports, will come to an end.  I certainly pray that the hangover will not be too debilitating.

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