The chart with which we opened, that of the UK bank rate between 1700 and 2011, is frightening for a number of reasons. One, because it smacks of desperation on the part of the monetary authorities. Two, because it is forcibly impoverishing a cohort of investors who can either sit on the sidelines quietly watching their savings evaporate in real terms courtesy of state-sanctioned inflationism, or who feel obligated to put their capital to work in risk asset markets for which their capital may never have been originally intended. Now that is moral hazard on the part of our monetary authorities ! Three, because artificially suppressing the cost of capital - assuming that individuals or corporations can admittedly borrow at anything close to those headline rates, if at all - sends out hugely destructive and plainly incorrect price signals to businesspeople and entrepreneurs. This runs the real risk of provoking a huge wave of malinvestments - investments undertaken solely because the market's price mechanism has been wilfully distorted, investments that would never be undertaken if market interest rates were at a more meaningful "high" level in real terms. The financial crisis was provoked in large part because monetary policy rates were kept artificially low. Do we really think it can be resolved by allowing history to repeat itself ? Four, because maintaining base interest rates at zero - and manipulating the price of government bonds higher with some vague sense of creating higher confidence in the process - makes it impossible to fairly and objectively value all risk assets, and not just debt. There is not one single market investment in existence the value of which has not been affected in some way by quantitative easing. Central banks might argue that that was precisely the point of the exercise. But playing a game against a dealer who arbitrarily makes and rewrites all the rules is not a game that many investors would voluntarily play.

David Fuller's view This may be true but you and I can only deal with the reality that markets provide, whatever the causes.

A graph of the UK bank rate from 1700-2011 from the Bank of England is certainly notable.