The fact that the idea of parking interest rates permanently at zero gets any academic attention at all, is in itself worrisome. It’s no secret that this was an idea embraced by none other than John Maynard Keynes, who thought it would be the key to effortless financing of whatever projects a central planner might dream up.
If the interest rate were permanently zero, the government’s fiscal levers of taxation and spending would be the alternative means of controlling inflation.
Naturally, this nonsense goes hand in hand with direct central bank control of individual spending decisions:
Also worth mentioning is the current push by the Bank of England towards central bank digital currencies (CBDCs), in which buyers and sellers would transfer money directly without having to use the banking system. This could enable central banks to encourage or discourage certain spending in more targeted ways, for example by restricting what can be spent by people in certain areas or income brackets. If inflation was controlled using only fiscal levers, CBDCs could be used to reinforce this policy.
JMK’s theories don’t work in practice, because no government has an incentive to cut spending and debt during good times, they only want to be able to spend as much as possible.
Additionally, there is no real way to calculate actual inflation, because there is too many moving parts in the economy, so we are stuck relying on government estimates, which are not comparable to the past, since they change how they calculate it on a regular basis.
Permanently zero interest rates is the financial equivalent of the perpetual motion machine. It is a fantasy that can never work.
Lots of people love fantasies and want them to be true. Sane societies call such people ‘children’ and do not put them in charge of anything important.
Insane societies elect them & place them in postions of power.
The Modern Monetary Theory people seem unusually quiet. Normally their opinions are highly inflated.
The exception being Chrystia Freeland whose self-regard is off the chart.
she gets that from prince selfie sox of black face . the hair apparent . actually the pearl of Peace River has been remarkably quiet
Rewarding the spenders and punishing the savers.
Zero interest is the same as the Islamic prohibition of all interest.
Naturally that made the world even worse for those who need to borrow because either they could not get the money at all or the lender took a percentage of whatever the borrower was using the money for. The entrepreneur with a great idea and good execution skills finds out that he is not allowed to pay 6% for a business loan but he is allowed to sell 40% of his genius idea to an “investor” for the same money. He does it because 60% of a good deal is better than 0% of a good deal though not nearly so nice as 94% of a good deal. Tough shit for you says JMK
The only slight good that comes of this idiocy is that it becomes impossible to borrow for consumption. But if you want to borrow a few bucks to feed your family because you’re out of work for two weeks, tough shit for you says JMK, again.
JMK was a vile socialist idiot.
the mussis charge interest. they calculate it and add it in to the principle at the beginning . no use having the red sea pedestrians make all the money
The problem with JMK is that he was an aristocrat. His recommendations on economics and money supply had nothing to do with the interests of most of a country; they only had to do with defending the interests of his class and his industry (banking). He may have been vile but his views of zero interest rates were insane. Medieval Europe had essentially zero interest rates because of the Church’s prohibition on usury. There was very little real economic growth until the moribund grip of the Roman Catholic Church was shattered by the Reformation.
The future that is coming down the pipe is simply unpalatable to most people, and most people will still be asleep when the powers that be finally have enough building blocks in place to wall them in.
15 minute cities with biometric entrance and exit features, minimalist diets that are Gov’t controlled and supplied, all funds digitally controlled by the Gov’t.. no freedom of assembly or movement, private transportation outlawed..no private ownership of property, houses..
Gov’t enforced vaccine requirements, no bodily autonomy.. just a number, a cog in the machine.
So..you commit wrong think? They can deny you your living space, they can deny you access to ‘your’ funds, you cannot buy food, you cannot get assistance, you can be denied medical care, you won’t even be allowed to stand on the corner with cup in hand..
Turn to religion for help? That’s been outlawed and replaced with edicts crafted by a body you didn’t vote for, when they still had voting of course..
If they don’t like you, they will un-person you and hound you to your grave..perhaps you take the easy way out and take up their kind offer of euthanasia..
All this is happening in some form or another right now! This is not some dystopian novel that you can set aside..you can continue to take it in the arse until all these disparate measures are concentrated in one place and enforced at gunpoint..
Or..
You fight like hell. You can show the apparatchiks that their policies are garbage.Don’t stand for any of it, because if you even give an inch they will bury you in a gulag faster than you can blink..
Time is short. The enemy is not at the gates, they are inside the walls and they have no desire to leave..at some point, very good people will have to do some very bad things that will feel morally repugnant.
Take solace in the fact that they do not feel this way AT ALL..all options are on the table for them, so act accordingly.
It is going to get very ugly, very soon..
The enemy is in control. All that you have stated is reality. Physical action when refusing to comply will be the only way through this and 99% of the populace are flat out cowards. I hold zero hope for the coming generations. Illiterate while being considered literate.
The ONLY arbiter of interest rates should be the FREE MARKET, based on how much money is being saved, versus how much is being lent. PERIOD. If ALL a bank has to lend is what people have saved (or deferred consumption of), then they will be FORCED to pay higher interest rates to savers to encourage savings and deferred spending if there is insufficient saving to balance out lending. Lower interest rates will send the message that more is being saved, so more will be available for purchase once long-term projects are complete, and higher rates will indicate that savings are lower, and short term projects would be better. THAT is how honest and free market saving/lending/banking work, and the ONLY way our system should operate. END THE FED!!!!!