2012-02-02blogspot.com

This is the problem Ben Bernanke and the Federal Reserve currently have--and it's their own stupid fault: They have promised to maintain interest rates at effectively 0% until at least the end of 2014--they have in fact announced this zero interest-rate policy (ZIRP) as the hallmark of their strategy to reignite the economy--

--but then they're surprised when businesses aren't borrowing more. They're surprised when lending is in fact contracting. They're surprised when the American economy doesn't start borrowing--and thus growing--like crazy.

So the American economy obviously doesn't benefit from ZIRP. In fact, it stagnates because of ZIRP.


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