The Economist:

The most powerful tool, of course, is the interest rate. But central banks are wary of using it to pop bubbles because it risks crushing growth as well. And, with the world economy in its current fragile state, they are rightly unwilling to jack up interest rates now.

But even if governments judge that the risks posed by raising rates now outweighs that of keeping them low, investors still have plenty of reasons to worry. The problem for them is not just that valuations look high by historic standards. It is also that the current combination of high asset prices, low interest rates and massive fiscal deficits is unsustainable.

[…]

Investors tempted to take comfort from the fact that asset prices are still below their peaks would do well to remember that they may yet fall back a very long way. The Japanese stock market still trades at a quarter of the high it reached 20 years ago. The NASDAQ trades at half the level it reached during dotcom mania. Today the prices of many assets are being held up by unsustainable fiscal and monetary stimulus. Something has to give.

I’m all too much of a pessimist already, but I’ve been worrying about this lately.

[Via Jason Fried]

I have stuff cluttering my apartment, my office, my parent’s house, and my thoughts due to nostalgia. It has a negative effect on my productivity and happiness, but what about my wallet?

I know it affects my income due to reduced productivity so I’m working on de-cluttering, but I can tell you exactly what one particular piece of nostalgia has cost me in the last six months: $19. What was it? A savings account. More specifically, my very first savings account. My parents opened it for me at First Vermont Bank and it’s followed me through quite a few mergers and acquisitions since.

Unfortunately, earlier this year it dropped below the $250 minimum when I got into a pinch. I never even realized it had ever acquired a minimum balance. I immediately called my bank, they refunded the fee, and I transferred enough money in to bring it back up above the minimum.

A few months later, I again had to let it drop below the minimum and I haven’t been able to restore it since so had been paying $4 a month in fees. What’s worse? That savings account only had a 0.01% APR, so even trying to keep it at the minimum was only earning me 2ยข a month. I obviously had not been following my own advice.

So, on Monday I closed the account and transferred the remaining $35 into a savings account currently earning 1.3% APR. Had I done this months ago I would’ve not only saved the $19 in fees, but also would have earned higher interest on the larger sum. Better late than never, but stupid nonetheless.