The theory is that if you take interest rates negative, people are going to say, "That's a silly game! I'm not going to lend my money to governments who want me to pay them. I am going to go into the stock market where I can get positive returns!"

Investors have to ask themselves two questions. How much can we grow our investments? And, can we afford our mistakes?

We normally think if you're going to lend someone money, you should get some reward for doing this. In Europe, it's a tax!

As we spend more, and as companies are pushed to invest, they say, "Hey wait a minute! There's more demand in the system. Let's invest more."

The one instrument that has relative political autonomy is monetary policy. Central banks do not need to go to Congress to get approval for an interest rate hike.

[When] the market is trying to get to terms with, first, lower global growth, particularly out of emerging markets and China. And, second, the market is worried the central banks have run out of ammunition. So put these two things together, and then investors are repricing the market lower.

The once-unthinkable loss of the AAA rating will constitute a further hit to already fragile business and consumer confidence.