Free Republic

U.S. Economy Drowning In A Liquidity Trap? Economics / US Economy May 26, 2013 - 06:33 PM GMT By: Frank Shostak Bruce Bartlett recently lamented in The New York Times that given the current state of economic affairs we need more Keynesian medicine to fix the US economy. According to Bartlett, the core insight of Keynesian economics is that there are very special economic circumstances in which the general rules of economics don’t apply and are in fact counterproductive. This happens when interest rates and inflation rates are so low that monetary policy becomes impotent; an increase in the money...

The Fed Is Out of Ammunition A discredited dollar is a likely outcome of the current crisis. By CHRISTOPHER WOOD With an estimated $4 trillion in housing wealth and $9 trillion in stock-market wealth destroyed so far in the United States, there is little doubt that we are witnessing a classic debt-deflation bust at work, characterized by falling prices, frozen credit markets and plummeting asset values. Those who want to understand the mechanism might ponder Irving Fisher's comment in 1933: When it comes to booms gone bust, "over-investment and over-speculation are often important; but they would have far less serious...

BOND VIGILANTES POUNCE ON PRICES...WHILE CONSIDERABLY MORE UPSIDE STILL LEFT IN EQUITIES Friday May 18, 2007 By Mike Paulenoff MPTrader.com What a week! My sense is that the watershed event that occurred was the plunge in the bond market (climb in yield), which I suspect is the beginning of a relentless back-up on the long end of the curve in response to the "inflationary" environment exuded by equities and commodities that has resulted from the constant creation of money and easy credit for years. In other words, up until this week, it seemed to me that the bond market was...