The interest rate needs to be at negative 6% “to supply the needed amount of monetary stimulus.”
As a result, “we are entering a world with interest rates that are far too high for the economy’s good,” Goldman Chief U.S. Economist Jan Hatzius wrote in a Jan. 16 research note.
As this Business Week writer tells us:
The solution is obvious: The Fed needs to deliberately raise the rate of inflation–maybe not all the way to 6%, but significantly above zero.
One way to do that is to print lots of money. The Fed can create money from thin air by purchasing assets such as Treasuries and mortgage-backed securities and paying for them by crediting the seller with newly created reserves at the central bank.
And you thought Krugman was a hoot!
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They’re suggesting that people be paid to go into debt? Wow, I need to start drinking again. Reality is just too weird.
Poof!
There went my retirement fund.
So which president will be on the upcoming 1 trillion dollar bill?
Impressive. Jan Hatzius said something so unbelievably stupid and lacking in good sense, I struggled to understand how he even has employment.
How is it this man has escaped being downsized?
But then I realize it. Goldman employed and continues to employ people like him. That’s why Goldman is in the toilet.
I like how he “figured” the negative interest rate at exactly -6% for 2 years.
Andrew, I like it: the Obama 1,000,000,000,000 dollar bill, nice ring to it. Of course, we may as well have put Bush on it, I suppose.
The irrationality of it all never ceases to disturb me. It is so frustrating.
Bill, haven’t you read any other sites? If so, you’d understand that everyone else is just fine, it’s the Austrian economists who live in an ivory tower and worship at the failed free market.
I’m told that every day when I try to point out how this country is being flushed down the toilet.
I just want to point out that they are not stupid, they are value maximising economic agents, trying to benefit themselves by exploiting the framework that is currently given to them (and coincidentally furthered/ entrenched by them).
Of course they do not care and do not strive for the better society, but morals aside, they are right.
Unless there are people who can see few steps ahead and are capable of changing current framework, these (and such) people, by fulfilling their nature, will act in this manner. You can not change them, you must change economic environment – basic rules that determine their actions.
Yes, don’t forget that Goldman Sachs will be the first recipients of the new money. They win. We loose.
I can’t believe the media are publishing this garbage. I can’t even listen to the talking head on Bloomberg anymore.
I feel like I’m riding in a crashing airplane. I’m not even sure if owning gold can save us. The gov’t is tampering with that too.
So which president will be on the upcoming 1 trillion dollar bill?
President Dwayne Elizondo Mountain Dew Herbert Camacho
I think Dubya has earned his place on the 10^12 bill.
I think we should start watching out for a hare and a guy in a goofy hat trying to offer us tea.
It makes me think of a paraphrase of that famous saying about war: What if they were giving away money and nobody would take it?
“I think Dubya has earned his place on the 10^12 bill.”
Not if we have WWIII (And no, I don’t consider so-called War on Terror to be one). I doubt paper money have any value in a nuke-infested world. We will all be busy playing Mad Max or some other 1980s sci-fi disaster movie.
C (the forgotten man):
Don’t worry about your retirement fund. It’ll be just fine if you lend it to me (and I’ll only charge you 4% yearly instead of the full 6%).Or, if you’d like an even cheaper rate, I’d do the deal for just 2% yearly and you don’t even have to lend me the principal (of course, under this deal, I’d need 10 years of that 2% paid in advance; then, 10 years from now, I’ll just send you another bill).
Come to think of it, maybe Bernie Madoff wasn’t a crook after all–just a little ahead of his time doing this same kind of deal because he could see it was the thing of the future.
I wish I were politically connected right now. I would love to have Helicopter Ben airdrop his money supply on my front lawn.
I didn’t see the strike-out, had general dyslexia, and read it as:
The Onion, “Oops, Goldman Sachs reports that 0%…”
Then got really surprised when I got an actual article to Business Week. What. The. Hell.
I’ve heard that Hong Kong tried this in the past. Can anyone further elaborate on this, and the implications which followed?
Henry,
How many bottles of Brawndo can I get with a President Comacho trillion dollar bill?
A new analysis by Goldman Sachs (GS) concludes that the Federal Reserve’s cut in the federal funds rate to a record low of zero to 0.25% on Dec. 16 isn’t going to be nearly enough to get the economy going again.
Yea, if we can just print a bunch of billion dollar bills, we’ll be rich! We’ll have rivers flowing with milk and honey! We’ll have gold in the streets! We will never have to work again!!
Hmm. That didn’t work. Maybe we should print trillion-dollar bills instead.
That may well be the stupidest “solution” I’ve yet heard. Of course, what else would you possibly expect from those clowns? Goldman Sachs is going to be bankrupt soon anyways, so at least we won’t have to endure such blatant cretinism. However, I will say that if there is one man idiotic enough to take such advice, it is most certainly Helicopter Benny-boy Bernanke.
I say we put William Howard Taft on the $1 trillion bill. He was the fattest president….should fit well.
It reminds me the cartoon with two beggers, one telling the other: “I can hardly wait for the inflation to arrive, so I become a billionaire”.
That Idiocracy movie was fabulous! We’re up for the “Time Masheen”!
Right! this reminds me of “the scorpion on the frog’s tale” in some movie.
The scorpion that escapes a wild fire on the back of a swimming frog, after swearing that won’t happen, ends up stinging that same frog anyway. The frog screams: -What you do stupid! Now we’re both going to die in this river! But the scorpion answers -”I can’t help it. I’m a scorpion. It’s my nature.”
Please forgive me! Both the site and the blog I am on here now are not wrong, far from it, but the post I am adding this comment to may not be adequate for my or rather your purpose… I was just looking for a very recent post on this blog and I happened to like this one. “The Onion” was so right here! Could maybe some compassionate soul among the ladies and gentlemen frequenting this blog, preferably someone with a sense of humor, let Mr. Gene Callahan know that there is something new he may want to know about. Not wanting to appear as someone not sticking by his word, I cannot email him anymore (till further notice)… Here’s the news: http://groups.yahoo.com/group/little_panarchy/
Thanks!
All hail the inflation tax!
Wow, it is amazing that people can still adhere to the Keynesian theory after seeing that it causes such absurd situations.
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