It’s all about the Benjamins baby. Oh man, that song came out 20 years ago.
But it really isn’t about the Benjamins. It’s about power. Larry Summers, economist emeritus for the Clinton wing of the Democratic Party wants your hundred dollar bills. Why? So that the Federal Reserve will be able to move to sub-zero rates without people packing away C notes in their mattresses and realizing a relative yield.
The central planners want to make us spend. They are getting desperate.
(From David Stockman’s Contra Corner)
Larry Summers is a pretentious Keynesian fool, but I refer to him as the Great Thinker’s Vicar on Earth for a reason. To wit, every time the latest experiment in Keynesian intervention fails——as 84 months of ZIRP and massive QE clearly have—–he can be counted on to trot out a new angle on why still another interventionist experiment or state sponsored financial fraud is just the ticket.
Right now he is leading the charge for the greatest stroke of foolishness yet conceived. Namely, negative interest rates based on the rubbish theory that the “natural” money market rate of interest is at an extraordinarily low point. Accordingly, the central bank should drive the “policy rate” to sub-zero levels in order to achieve the appropriate level of “accommodation” in an economy that refuses to attain “escape velocity”.