tag:blogger.com,1999:blog-1527766217650773141.post9028462455845434022..comments2023-07-12T06:12:30.772-07:00Comments on Demand Side Transcript: Steve Keen: “Back to the Future” in the U.S. economyAlanhttp://www.blogger.com/profile/07323700324276425194noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1527766217650773141.post-12082103437011975472010-09-07T07:09:47.131-07:002010-09-07T07:09:47.131-07:00The problem is that as the Fed drop ever larger su...The problem is that as the Fed drop ever larger sums of money on the banking system they will still not lend it out as there simply is not the demand for credit at the terms the banks are now demanding. It would be better if the QE was targeted at the state's buying up muni's and enabling them to maintain services until the private sector deleveraging has completed. <br /><br />All that the existing QE has achieved is to inflate a currency bubble and allowed the big banks to fund a dollar carry trade. Then there has been a deliberately badly designed stimulus to basically denounce Keynesian strategies when it inevitably failed.David Lazarusnoreply@blogger.comtag:blogger.com,1999:blog-1527766217650773141.post-75457660822622651742010-09-06T02:28:51.243-07:002010-09-06T02:28:51.243-07:00Operation TWIST Again
The title of this article ...<a href="http://www.suckerforum.info/forum/topic/the-yield-curve-twist-omen" rel="nofollow"><b>Operation TWIST Again</b></a><br /><br /><br />The title of this article comes from an operation very similar to Quantitative Easing engineered by the Federal Reserve System in the 60's, called Operation TWIST, which ended in a resounding failure and the panic abandon of the gold standard in 1971.<br /><br /><a href="http://www.stlouisfed.org/publications/re/articles/?id=1911" rel="nofollow">Operation TWIST: To Boldly Go Where We Have Gone Before: Repeating the Interest Rate Mistakes of the Past</a> by Adam M. Zaretsky of the Federal Reserve Bank of St. Louis.<br /><br />All the Market Crashes we have witnessed have been the result of the yield curve suddenly returning from undervalued to normal. That was true for the "sub prime crisis" as it was for any other crash in history : it is the only way to account for a discontinuity in stock market value If for other crash the easy cure was to lower short term rate, this time it will be, of course, impossible.Maestrohttps://www.blogger.com/profile/02329956808668193091noreply@blogger.com