Liquidity Trap or Fed Crap?

Keynes proposed the idea of a “liquidity trap” in which he hypothesized that at a certain point (when interest rates have fallen as far as they can), people will hoard their money because a rise in interest rates would lead to losses on bond holdings. As a “solution,” some central banks, most notably Sweden, have proposed the idea of a negative interest rate in order to end the hoarding. Frank Shostak turns all of these myths upside down and names the culprit: the central bank.

Read the article here and End The Fed here. Focus on your Senators. We need their votes now.

Published in

Post a comment