2009?
2010?
2011?
2012?
I mean, it's so unlikely it's tough to even visualize.
Yet one day, they will. Maybe in a panic to defend a plummeting dollar. Maybe after gas hits $5 a gallon.
And then ZIRP will be as if we were living in a dream.
But today, living through the greatest deflation and depression in generations, a day of 2% or 5% or 10% interest rates seems like a million years away.
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That's what will make fighting inflation so difficult. Raise rates and the economy falls off a cliff. Nice corner you guys have painted us all into Ben.
Flipped to Fox News today and the ticker read:
Fed Chair Calls End of Recession
Happy Days are here again?
For Justice we must go to Don Corleone.
Leave the Gun. Take the cannoli.
Right over here, Ben...
I wonder what the market would do then?
Just think if someone starts liquidating a bunch of treasuries and sends rates to the moon.Think how things would be if interest rate were 10%.
I'm beginning to hear more about this being a 'balance sheet recession'.
Nomura economist Richard Koo identifies Japan's experience in the 1990s as a 'balance sheet recession'.
From what I understand, it's chief characteristic is that assets held by banks, businesses and individuals decline so much that it ruins their balance sheets. So they all stop borrowing money and focus on paying back the money they owe.
Sound familiar?
The Japanese solution was to make up for private spending with government spending.
The malaise lasted about 15 years but Koo says that's because the government curtailed spending too quickly. Doesn't seem like our government is going to make that mistake, not with dems in control of the white house, congress and senate.
No, the mistake the dems will make (not that the gop is any better, just different) is that they'll keep rates low forever and spend until they can't even remember why they started.
The new term is 'stag-hyper-inflation'.
Bye-bye dollar! See ya! It was great having you! Have a nice flight! So long, buh-bye now!
Even the Google ads here know the score.
The Fed can never 'retire' the Greenspan put.
How can they ?
They are still trying to get more people into the debt trap.
In the face of current circumstances, who in their right mind, would want to take on more debt IF it becomes more expensive.
No, all we've got are a bunch of one trick monkeys in the Federal Reserve.
Their only answer to any crisis, is to CUT interest rates.
And see where it has got us ?
Is it working ?
Every sasher knows the answer.
But today, living through the greatest deflation and depression in generations, a day of 2% or 5% or 10% interest rates seems like a million years away.
I'm reminded of this every time I look at my savings account. Fortunately, when my savings are made worthless by hyperinflation or a failure of the issuing government I won't have to worry about my poor returns anymore.
The bond market will decide when rates rise - period!
WHAT A TOTAL RIPOFF
They'll raise them as soon as homes become affordable. After all, they've got to keep people enslaved with high mortgage payments, lest they be freed to think and enjoy life with extra cash.
What the Fed has done is essentially criminal. They took rates down too low, held them down that low for too long, then after a pathetic rise, took them down even faster to essentially zero. This is one of the biggest official scams of modern history.
By the time these crooks relent, interest rates will skyrocket ... necessarily. The government can't just continue pretending that the cost of credit is this low for this long. Money has a price, and the market hasn't been able to set the REAL price of money for some time.
I was confidant Ben would raise rates two years ago, but now realize how wrong I was about the outcome.
In a normal recession Ben could have raised rates.
This situation is far from normal. and has been going on too long for the medicine (higher rates)to have any effect.
I wish I would have locked in CD rates long term, instead of 6mo-1 yr durations.
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