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‘It Never Works’: Larry Kudlow Blasts Negative Rates 48 Hours After Trump Demanded Negative Rates

"It never works and it won’t work this time either".

"It never works and it won’t work this time either".
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3 comments on “‘It Never Works’: Larry Kudlow Blasts Negative Rates 48 Hours After Trump Demanded Negative Rates

  1. mfn says:

    Trump is a hedgehog. He knows only one thing: borrow as much money as you can, at the lowest possible rate, and service the debt until you can’t. Then declare bankruptcy. Wash, rinse, and repeat.

  2. nostradamus jr says:

    A world of Catch-22 conundrums, caught between real yields and nominal, mixed with the chaos of trump tweets:

    Neo-Fisherian denial will tend to produce inflation lower than central banks’ inflation targets and nominal interest rates that are at central banks’ effective lower bounds—the low-inflation policy trap. But what of it? There are no good reasons to think that, for example, 0 percent inflation is worse than 2 percent inflation, as long as inflation remains predictable. But “permazero” damages the hard-won credibility of central banks if they claim to be able to produce 2 percent inflation consistently, yet fail to do so. As well, a central bank stuck in a low-inflation policy trap with a zero nominal interest rate has no tools to use, other than unconventional ones, if a recession unfolds. In such circumstances, a central bank that is concerned with stabilization—in the case of the Fed, concerned with fulfilling its “maximum employment” mandate—cannot cut interest rates. And we know that a central bank stuck in a low-inflation trap and wedded to conventional wisdom resorts to unconventional monetary policies, which are potentially ineffective and still poorly understood.

    https://www.stlouisfed.org/publications/regional-economist/july-2016/neo-fisherism-a-radical-idea-or-the-most-obvious-solution-to-the-low-inflation-problem

  3. What Larry meant to say is that his boss is a bonehead.

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