liquidity trap

Ever since the U.S. financial crisis in 2008 there have been many comparisons to Japan and their "lost decade." Most comparisons mark the start of each financial crisis as the end of 1989 for Japan and 2007 for the U.S. We believe each…

I was just having an argument/debate about quantitative easing. Marshall Auerback, Randy Wray and I all have posts here at Credit Writedowns which explain that quantitative easing does not create new net financial assets and is merely an…

Eric Janszen, Interview with Dr. Michael Hudson 6 November, 2010 Janszen (E): What I’m noting, starting with the gold crisis over the last few weeks, and the public nature of some of the complaints that we’re hearing out of Brazil and…

Randall Wray shows that quantitative easing will be ineffective except to the degree it can induce a shift in private portfolio preferences. He uses a recent post by hedge fund manager Warren Mosler to demonstrate that QE is the equivalent…

In the fall of 2008, when the government took extreme steps to avoid a financial collapse, it created, what might be described as a partial liquidity trap. At the time, this was not a problem. The policymakers were not trying to assist…

by Michael Hudson, President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of…

The Fed’s announcement of a renewed commitment to Quantitative Easing has been well telegraphed and the market’s reaction is likely to be subdued. We are in a “liquidity trap,” where interest rates or trillions in asset purchases may…

Here's a good discussion of what liquidity traps are from John Hussman. His weekly market commentary begins: "There is the possibility... that after the rate of interest has fallen to a certain level, liquidity preference is…

A few months ago I was running through some out of the box thinking for how the Fed might be able to give quantitative easing more of an impact. Not that I think the Fed should go QE, but if they do, the question is what should they do.…

John Hussman has a piece out today that dissects the current economic environment in two parts. In part one, Hussman puts a spotlight on quantitative easing (QE) and why it is unlikely to have the intentioned effect on the U.S. economy. And…