Perma-slump and Project | 114 comments (114 topical, editorial, 0 hidden)

That is not his assumption. (4.00 / 3)

In a liquidity trap, which we are in, it is simply economics. The interest rate will not durably go up, there are too much savings, too little demand and therefore too little investment. So unless you have a model to show how interest rates would go up, I would say the one doing the assuming is you.

It may of course be a matter of fact that high civil servants make this same assumption, but I don't understand why you would lend any credence to the claim on that basis. After all, they have been wrong about most everything lately. Why would they be right on this score?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Thu May 29th, 2014 at 03:32:10 PM EST
[ Parent ]

Re: That is not his assumption. (4.00 / 2)

This subthread began with my suggestion that fear of a jump in interest rates (aka punishment by teh markets, whether personified by "bond vigilantes" or metaphorically represented by the "invisible hand") was a factor in Holland/the government's pusillanimous stance. That's a political comment that doesn't call for an economic model.

As to how justified that fear may be, you seem to agree there would be a rise, but it would not last long. You may be right. It doesn't change my political comment.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri May 30th, 2014 at 02:06:11 AM EST
[ Parent ]

Re: That is not his assumption. (4.00 / 2)

I just remarked that the "bond vigilantes " are an largely imaginary threat.

by IM on Fri May 30th, 2014 at 09:24:45 AM EST
[ Parent ]

Re: That is not his assumption. (none / 0)

They are very real, for any country which lacks a lender of last resort.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri May 30th, 2014 at 11:11:13 AM EST
[ Parent ]

Re: That is not his assumption. (4.00 / 2)

It's interesting how much top politicians (and their policies) are driven by imaginary threats. On both sides of the Rhine.

by Bernard (bernard) on Fri May 30th, 2014 at 12:53:33 PM EST
[ Parent ]

Re: That is not his assumption. (none / 1)

Our imaginations can provide us with reasons to do or not do anything we desire. Very convenient. Convenient imaginations conjoined with convenient consciences.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 2nd, 2014 at 07:24:16 PM EST
[ Parent ]

Perma-slump and Project | 114 comments (114 topical, 0 editorial, 0 hidden)

Top Diaries

The Really Hard Work Starts Now

More Status Quo please - for now

Energy (and Other) Events Monthly - 2024

The Irish general election draws near

Basic Electricity for the Bottom Billion

Recent Diaries

Full Circle from Baghdad to Damascus

Turks and Sauds to Install Sunni Terror in Damascus, Syria -...

More Back-Stabbing in the New Middle East

#WeAreNATO v Rest of the World

The Really Hard Work Starts Now

US Syrian Quagmire - A Second Life

More Status Quo please - for now

The Arab States Are Faced with Virulent Zionism in Israel

December 2024

Next Step An Integrated, Sovereign Europe

Making the Europe and BreXit Trump Proof ...

Energy (and Other) Events Monthly - 2024

Not A Permanent Ceasefire Lebanon-Israel

Clash of Empires - Crossroads @ Middle East

City Agriculture - November 26, 2024

Harry Truman: 'The Buck Stops Here'

German Election False Promises, Lack of Vision

EU Patriots, Hudson, VDL: ICC Arrest Warrants

Wilderism Hate Mongering, Now ICC Troublemaker

P3+1 Threaten Iran After Ditching JCPOA Deal

Occasional Series