You ever read Jim Grant? You can sweep a lot of stuff under the rug in a falling interest rate environment. But after forty years of doing so, rates really can't go any lower, and there's little stimulative effect from running a negative rate policy. We're left with a sea of printing and liquidity distorting asset prices everywhere, supporting loss-making zombie companies and reckless capital deployment and ultimately economic malaise. I see these distortions spilling into the real world daily in my area. We've had an explosion of luxury apartment development in the last decade and many of the finished projects still have tons of vacancy, yet the building goes on and capacity increases.
As I've said before, I believe the central bankers are scared shitless at what they've wrought, which is why they have to constantly jawbone and tweak and "stimulate" and respond every time we have a piddling correction. They've made the markets utterly dependent on them, never more than in the last year, and in turn have made themselves slaves to the market. They've forced retirees and pension funds to chase risky assets at high prices in search of yield because the risk free rate has gotten them so little for so long. Conservative investors and savers have been shafted. Central banks can't afford to raise rates with the vast ocean of debt and extremely extended stock valuations, but the problem only gets worse the longer they let this charade go on.
I don't know when or how the party stops; until it does I'll sound like Chicken Little. It's going to be a gut-wrenching and protracted process when it does, with real-world consequences far beyond the financial markets.