After an extended period in the doldrums, interest rates are finally on the rise. As I’ve written before, this could have a momentous effect on asset prices. And most at risk will be those who have accumulated immense debt, and investors who have bought shares in low-growth big caps. Historically low interest rates have not worked. Hoping that it would increase consumption, central banks first cut short-term interest rates to zero (or below). After failing at spurring consumer activity by cutting short-term rates, the central banks then worked in concert to drive long-term bond rates lower, trusting that such a move would trigger a rush into other assets, driving those asset prices higher and in turn awakening the ‘wealth effect’. It was then thought, that with everyone flush with new wealth from rising property and stock prices, the newly-minted rich would go out and spend. They didn’t.