“The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world.
We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30 per cent of global government debt at negative yields, combined with quantitative easing on a massive scale.
In times like these, preservation of capital in real terms continues to be as important an objective as any in the management of your company’s assets.”
Rothschild said to date quantitative easing has successfully driven stock markets higher, but he rightfully fears this will not go on forever. He adds that a number of headwinds could also derail markets – including the very uncertain geopolitical risk.