Posted on 06/11/2010 1:45:13 AM PDT by TigerLikesRooster
Roubini: Europe Should Cut Interest Rates to Zero
Thursday, June 10, 2010 05:04 PM
By: Julie Crawshaw
The European Central Bank should slash its benchmark interest rate to zero and expand government bond purchases to offset the recessionary effects of euro-area austerity measures, says New York University economist Nouriel Roubini.
“That has to be the policy mix: tight fiscal, but much more easy money, looser monetary policy, more quantitative easing and also a weakening of the euro,” says Roubini, who predicted the financial crisis.
“Going to zero alone is not going to be enough, it’s 100 basis points,” says Roubini. (One basis point is equivalent to 0.01%, or one-hundredth of a percentage point.)
“They need to go to zero, they need to do more quantitative easing, they need to support dysfunctional markets, they need to signal that they are actually not uncomfortable with a weaker euro as long as that is a gradual and orderly process,” he told Bloomberg Business Week.
Roubini says he can see the euro falling to parity against the U.S. dollar.
(Excerpt) Read more at moneynews.com ...
P!
I am awaiting the mandatory negative intrest rate Obama loans.
Cutting red-tape/bureaucracy/regulations would do more for world economies than lower interest rates.
Cutting taxes comes in a distant second. Lower interest rates are only third-best at improving living standards.
Why would Obobo change puppets in the middle of the show?
If puppet is discredited, new puppet is needed. Don’t worry. he will be still a puppet.:-)
What’s next? Paying folks to borrow?
We're almost there now. When interest rates are below Fed-caused inflation rates, it's the same thing.
I never knew about Roubini until the press started praising him for predicting the financial crisis. For that, he should be congratulated.
But it's beyond stupid to me that he (and so many, many others) propose that our way out of this crunch is to do exactly what we did to get into it?
Curious, isn't it?
Wouldn't it be easier for them to just tell us all to take magic markers and add a zero to the end of the number on every piece of US currency we have?
This is definitely not going to end well.
That would work but the wheelbarrow lobby is too powerful.
Peter Schiff predicted the crisis and we don’t hear anyone seriously considering him for Fed Raserve Chair. Maybe we should!
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