On Monday Larry Fink, CEO BlackRock the world's largest asset manager, reportedly told investors in a recent letter that "negative interest rates are lining up savers and the economy for 'potentially dangerous financial and economic consequences.'"
According to Fink, lower rates force people to save more for their retirements and other needs, cutting into discretionary income and translating to less spending to aid economic growth. In other words, something has got to give if these people are going to reach their goals, the economy or the people and their retirement goals.
The point is in such low interest rate environment one has to put more money aside each year to reach a certain dollar amount goal for annual living expenses. But that's not the only drag on the situation, insurance companies and state retirement funds face a similar problem since their projects usually are based on what were higher rates in the past.
Here's a chart from BlackRock. We don't know for sure, but just maybe it's what Fink is referring to and the dangers that await.
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