Zero-Interest Economy: Is the Capital Economy out of Remedies?

Zero Interest Economy: Is the Capital Economy out of Remedies?
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In a news article published November 1st,2008 at Alsharq-Alawsat * daily news paper, (link provided below) an economic report points to a growing trend of curing the ailing international economy that has suffered an unprecedented economic crisis described by some as worst than a depression since it reveals major flows of theory that led to a faulty practice that may lead to a not-yet realized economic disaster. The report points to a policy being adopted by the US and now Japan to push towards a zero interest rate (down to 0.3% from 0.5%) in an effort to stimulate the falling global economy. This trend reflects a profound anti-capital principal and questions a number of fundamental principles or axioms of the capital economy. The article also mentions that several leading economies are seriously considering a similar course of action. My questions and concerns are:
1. What is the real nature of this course and how far is it studied and analyzed?
2. Does this action signify that a zero-interest economy provides for the ultimate flourishing economies? And if so, why hasn’t such a trend been adopted years or decades ago?
3. Will this course or corrective or stimulus action be a major shift in the way global economic and financial institutions “Do Business”?
4. Shall this course denote a confession that the interest-based economy seeks the solution to its crises (plural) in a zero-interest or interest-free economic environment? If so, where does this seriously odd situation leave a legend of interest bearing loans that overburdened everyone and every country and has driven all but a few countries to the brink of disaster? [Including the highest country in debt the USA, that ironically runs huge deficits, record financial and personal bankruptcies and mounts insurmountable debts to its future generations ]
5. Shall the future economic alternative to the current problematic one launches from the point and principal of zero-interest or interest-free foundation?
6. Shall this solution be a mere economic resolve to a problem or a complete alternative economy?
7. What will happen to the current commitments (mainly huge debts compiled from high interests on loans)?

And the simple but multi-billion dollar question:

8. WHERE does that leave us as a heavily indebted nation and a country that has no economic policy let alone economic strategy?

I am sure these concerns and questions burden everyone who is remotely associated with or interested in the economies of developing countries. Nevertheless, we hardly see, read, watch, or even hear about a silver bullet to solve the global economic crisis and may be bring world peace for that matter.

Ayman Ahmed


*(Link: http://www.aawsat.com/details.asp?section=6&a...493097&issueno=10931)

*** This article was first posted at Sudaneseconomist.com

A brief follow up shows further reduction in interest rates. The US has reduced it's interest rate further down to below 0.25% while the UK has reduced it to a record 1.5% (approximatly) making it the lowest recorded rate since 1694 YES....1694 as reported.
We have to ask ourselves is such a crisses a wake up call for the rest of us who do not contribute to the economic decision or is it a chance to rethink the whole notion of " No economy can survive on 0% interest" !!!!!

Ayman Ahmed