One of South Africa\u2019s top economists on Saturday questioned whether the lowering of interest rates by central banks was worthwhile.<\/p>\n
Director and chief economist of the Efficient Group Dawie Roodt was speaking at the Free Market Foundation, an organisation that \u201cpromotes and fosters an open society, the rule of law, personal liberty, and economic and press freedom\u201d.<\/p>\n
Roodt questioned whether the central banks were pushing interest rates down on their own or following market trends.<\/p>\n
\u201cThis means people are encouraged to invest \u2013 but we have to understand there are two worlds people live in economically. Those that are thriving and those who aren\u2019t. We have previously seen debt levels rise and eventually form an asset bubble when rates are dropped,\u201d he said.<\/p>\n
Roodt added that the central bank was a relatively new concept in existence for just under a century.<\/p>\n
\u201cThey have claimed the rights to decide what the price of money should be and manipulate the consumption of society economically,\u201d he said.<\/p>\n
Speaking on the political sphere of South Africa and its economic impact, Roodt criticised Cosatu saying the union has become a representative of civil servants rather than workers.<\/p>\n
\u201cThis kind of shift can cause instability and frustration from the working class who are becoming increasingly despondent with unions.\u201d<\/p>\n