Money market rates at the zero bound for 90 straight months - Stockman

Once it punts again at the June meeting owing to Brexit worries it will have effectively pegged money market rates at the zero bound for 90 straight months.

There has never been a time in financial history when anything close to this happened, including the 1930s. 

Nor was interest free money for eight years ever even imagined in the entire history of monetary thought.

So where’s the fire? What monumental emergency justifies this resort to radical monetary intrusion and repression?

David Stockman 30 April  2016


Comment by Rolf Englund:

Stockman writes that:

The truth is, there can never by an honest shortage of “aggregate demand” because the latter is nothing more than spending for consumer and capital goods that is financed from the flow of income and production.

As “Say’s Law” famously and correctly insists, “supply creates its own demand”.

End cit


We can read at Wikipedia that

Say's law was generally accepted throughout the 19th century, though modified to incorporate the idea of a "boom-and-bust" cycle. During the worldwide Great Depression of the 1930s, the theories of Keynesian economics disputed Say's conclusions.


Scholars disagree on the question of whether it was Say who first stated the principle, but by convention, Say's law has been another name for the law of markets ever since John Maynard Keynes used the term in the 1930s.....  more








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