In response to an FT article by Professor Kenneth Rogoff on 9th October 2015, entitled 'World's economic slowdown is hangover not a coma'.
Here we go again!
"A radical answer is to cut interest rates well below zero. This would restore the power of monetary policy to spur growth. But for now it is futuristic"
The reason it is 'futuristic' is that it requires Professor Rogoff's other radical idea to enforce it - the cashless society. Thankfully he has not mentioned that insidious nonsense in this article - I suspect because it received a resounding 'no' the last three times it was floated on these pages.
It never seems to occur to central planners that growth comes from capital invested wisely, and that capital is only invested wisely on the basis of market signals - I.E. 'honest' prices that reflect people's choices in the real world.
The most important price in capitalism is the interest rate on the global reserve currency. The notion that this price can be held at zero by a group of 12 policymakers looking out from an ivory tower...without causing massive distortions to the real economy...is absurd. Only someone who has spent their life fiddling with spreadsheets, indulging themselves in delusions of academic grandeur, could come up with such tosh. A capitalist, a business person, or indeed anyone that had ever had a real job would know better.
Eight years of ZIRP has kept countless 'zombies' on life support. The steady accumulation of dead wood and misallocated capital has stifled new growth. And now they want NIRP. Clueless.