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The Fed and the Zero Handle

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Pushing a string 2% lower

is still pushing a string. M1 is flat to down. Potential borrowers don't want the risk of debt and banks don't want the risk of lending. Rates won't do it. And lower rates aren't really needed with the real economy growing at 3%, just a reality check in the credit markets.

Tom Hanna of MO @ Sep 17, 2008 22:54:43 PM

We need zero interest rates like we need to all be shot.
Rates are too low, not too high. Same with taxes.
As for T-bills having no risk, it's nuts. The whole USA government is the next AIG. No, they don't default. They just devalue your money to print more.
Fed funds and 3-month bills should both be 5%. The dollar is losing value at that rate----at least.

of @ Sep 17, 2008 16:18:08 PM

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