The Interest Rate Illusion: Lessons from The Price of Time
“Zero percent interest is not free money. It’s the costliest mistake in human history".
Central bankers have fooled themselves, and the world, into believing that the cost of capital can be wished away. For over a decade, the global economy gorged itself on zero interest rates, money printing, and yield suppression. Edward Chancellor’s The Price of Time is a searing historical account that cuts through the technocratic fog and exposes the most dangerous myth of all: that interest rates can be manipulated without consequence. This book is a warning. A grave one.
Interest Is Not Just a Price, It’s Time, Risk, and Reality
Chancellor argues that interest is not merely the “price of money” It’s the price of time, a signal that balances the future against the present, savings against consumption, prudence against speculation. Manipulating this signal is like cutting the brake line on a freight train and expecting it to stop on command.
When central banks slash rates to zero or below, they’re not stimulating growth, they’re warping reality.
The Era of Fake Prices
The core lesson of the book? Low interest rates don’t lead to sustainable prosperity. They create:
Asset bubbles (stocks, bonds, housing, crypto… you name it)
Zombie companies that should have gone bankrupt years ago
Malinvestment in projects that wouldn’t survive in a world of honest capital costs
Inequality, as asset owners reap the rewards while savers and workers are crushed
Financial repression, forcing people to take on ever greater risk to stand still
In short, Chancellor shows that when you falsify the most important price in capitalism, the price of time, you get a system built on sand.
Zombieconomics and the Destruction of Productivity
Zero rates kept dead businesses alive, but they killed productivity. Chancellor details how Japan's ZIRP/NIRP (zero and negative interest rate policy) and Europe’s similar policies stagnated their economies, propped up inefficient firms, and locked in a twilight economy where risk is subsidized and discipline is dead.
This isn’t “stimulus”, it’s capital misallocation on a global scale, all in the name of preventing a short-term correction.
History Repeats, But Louder
From Babylon to Venice, the Medici to modern monetary theorists, Chancellor takes the reader through five millennia of interest rate history. The verdict? Every time interest rates are suppressed by decree, the result is the same:
Speculation, distortion, collapse.
What’s different this time? The scale. We didn’t just suppress interest, we nuked it, and then rewrote the laws of money to keep the illusion going.
The Real “Cost of Capital” Is Now Coming Due
The Price of Time is a sobering reminder: free money isn’t free. The explosion of debt, the hollowing out of the middle class, and the inflationary backlash of 2021-2022 are not random shocks. They are the logical endgame of interest rate manipulation. As Chancellor puts it:
“Low interest rates are not a cure, they’re a cause.”
Central banks didn’t save the economy. They inflated the biggest everything bubble in history. And now, with the bill coming due, the pain is only just beginning.
Final Warning
This book should be required reading for every investor, policymaker, and citizen who still believes in sound money and honest finance. It proves, conclusively, that you cannot manipulate time without consequences. You can hide from risk. You can paper over losses. But eventually… time catches up.
🔍 TL;DR Lessons from The Price of Time:
Interest is the price of time, risk, and capital, don’t fake it.
Zero and negative rates are not neutral, they are destructive.
Artificially low rates fuel bubbles, inequality, and zombie economies.
Every attempt in history to suppress interest rates has ended in disaster.
The “everything bubble” is a direct consequence of a global interest rate fantasy.
Want to read it yourself?
Get Edward Chancellor’s The Price of Time: The Real Story of Interest.
And then ask yourself: Why didn’t they teach us this in school?
So money is a unit of account of spacetime?