AuthorTopic: When You Find Yourself in a Hole, Stop Digging  (Read 556 times)

Offline Eddie

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When You Find Yourself in a Hole, Stop Digging
« on: March 20, 2016, 11:12:56 AM »
The author of this piece on Negative Interest Rate Policy (NIRP) refers to the line above as "The First Law of Holes". I like that.

His conclusion, that at some point the central banks will discover NIRP doesn't work, and that a paradigm shift will occur in monetary policy overnight, is an interesting idea to consider. He says we should be ready for that to happen.

I don't know if he's right, but I hope he is. For a while now, the banks have been lending long term at very low rates, while borrowing short term.  This is a recipe for bankruptcy, under ordinary conditions. But of course, the banks have the government to bail them out....they hope.

http://www.zerohedge.com/news/2016-03-20/nirp-hail-mary
What makes the desert beautiful is that somewhere it hides a well.

Offline Surly1

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Re: When You Find Yourself in a Hole, Stop Digging
« Reply #1 on: March 20, 2016, 12:10:38 PM »
The author of this piece on Negative Interest Rate Policy (NIRP) refers to the line above as "The First Law of Holes". I like that.

First time I encountered this quote is was in something the much missed Molly Ivins wrote about the Texas Lege.
"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound

Offline agelbert

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Re: When You Find Yourself in a Hole, Stop Digging
« Reply #2 on: March 20, 2016, 01:19:33 PM »
The author of this piece on Negative Interest Rate Policy (NIRP) refers to the line above as "The First Law of Holes". I like that.

His conclusion, that at some point the central banks will discover NIRP doesn't work, and that a paradigm shift will occur in monetary policy overnight, is an interesting idea to consider. He says we should be ready for that to happen.

I don't know if he's right, but I hope he is. For a while now, the banks have been lending long term at very low rates, while borrowing short term.  This is a recipe for bankruptcy, under ordinary conditions. But of course, the banks have the government to bail them out....they hope.

http://www.zerohedge.com/news/2016-03-20/nirp-hail-mary

The author of this piece on Negative Interest Rate Policy (NIRP) refers to the line above as "The First Law of Holes". I like that.

First time I encountered this quote is was in something the much missed Molly Ivins wrote about the Texas Lege.

NIRP is like the selective application of the law of gravity. It is impossible unless you create a "real world" where, uh, see the queen in Alice in wonderland.

At any rate, NIRP is bullshit BECAUSE, even if the banks claimed they were applying it, they would only do so, like the 16 trillion dollars or so the "Federal Reserve" GAVE AWAY to the bankrupt banks on OUR DIME, selectively.

The REAL hole, that continues to be dug by the most influential homo saps hither and yon, is making up double talk that labels an economically subtractive process as an "additive" one.  :evil4:



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« Last Edit: March 20, 2016, 01:28:54 PM by agelbert »
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