No You missed the point. It is the actual execution of the negative interest rate I am discussing. It is not something that the central bank necessarily has any control over. The banks set their own interest rates relative to demand for credit derivatives so the base rate is not something that relates to them in around half interest rate decisions. Even the rates that have to fall in line with the base rate can be two percent off in the UK. This was the point of the article the practical application of the idea is lacking regardless of of inflation or deflation. Whether the macroeconomic side of things justifies it or not it is not something that could be imo practically implemented. Sometimes I listen to Martinghoul. But there is a lot he is missing sometimes. A lot of the time there are points people miss here and he does too. I look at things in a different way because I am an applied economist. I develop new ideas that enable flexibility you do not have. Anyway if you look the interest rate you get at a bank is not the base rate that is uniform across the world. The lending rate is very high because of the market risk. Risk is the key to interest rates at the moment. Please read the below. http://morganisteconomics.blogspot.com/2011/11/risk-is-reason-economy-is-not-growing.html
Thank you for your response. I'm going to read it carefully, more than once, and think about it. Thanks again. I have to wait until this headache you gave me subsides. I should have read the entire article to begin with.
remember us little people when you get big. ,, When you go to the Grammys , pinch KAty PErrys ass for me,,,, Ef
Morganist, having now read your article with greater attention. I now understand the thrust of your article. I think, actually, it is well written and one of your better articles. It clearly makes the case for at least the possibility that lowering the base rate any further by itself may be rather ineffective in achieving greater loan demand and an upswing in consumption. Nice article. There are other arrows in the central banks quiver, and in the U.S. at least, the Central Bank is led by a very bright Fed Chairman. They have shown some creativity already, and my guess is that they will succeed in staving of aggregate deflation. I wait anxiously to see what's next. Very, very nice article. Congratulations!