permanent zero

The Fed’s intent is not to create consumer inflation, but rather asset inflation — primarily in the equity market.  By pulling longer-term bond yields lower, the Fed hopes that this will alter how investors value equities relative…

When faced with a balance sheet recession and anaemic demand growth, Japan pushed short-term interest rates to zero and preceded to print money. This created the infamous Japanese carry trade in which Japanese investors would buy…

As you know, I have been back pedalling on my support for fiscal stimulus since late in 2009. I still think fiscal policy is effective – more so than monetary policy; quantitative easing is a bust because we are in a liquidity trap. But the…