Recovery? Excess liquidity reflating commodity prices Nov 9, 2009
Even though policymakers may have been successful in preventing the global economy from falling into an outright liquidity trap, there are now increasing signs that they are not getting the desired results in terms of fostering a sustainable recovery. A lot of the excess liquidity pumped into the system is heading towards unproductive assets in a way that could derail the comeback story. (India Times)
Bernankeism - the artof spreading starvation Nov 5, 2009
This is different from the thinking of John Maynard Keynes, who called for infrastructure spending to stimulate the economy and discarded money injection into banks that can create a liquidity trap, or monetizing record fiscal deficits on current expenditure that cannot be rolled back later for political reasons. Bernanke still has not distinguished whether the US economy collapsed because of excessive demand fueled by excessive credit, naturally followed by general bank failures, or because of... (Asia Times Online)
Indian market worth the premium: CLSA Nov 3, 2009
Christopher Wood, the chief Asia-Pacific equity strategist at CLSA, is not very optimistic about the sustainability of growth in the US economy, which, he believes, is increasingly reliant on government support and is mired in a Japanese-style liquidity trap ... But consumption and unemployment situations remain fundamentally sub-par and we remain at risk in the US from what I call a Japanese-style liquidity trap ... What do you really mean by the US being in a liquidity trap and the macro... (India Times)
For US, China is the financial bogeyman Sep 18, 2009
It is almost as if viewers are asked to believe the Chinese government is somehow complicit in America's debt problem, an idea not without some contemporary support from economists who believe an excess in savings from China is part of the supply side problem to this largely misunderstood liquidity trap from last year. In an advertisement that should crisply advocate personal responsibility, and at its better moments does just that, the specter of China is thrown into the mix. (Asia Times Online)
The Worlds Most Expensive Road Signs Sep 5, 2009
ByteMe - your liquidity trap Keynesian mumbo jumbo is a load of crap. What you really endorse is central planning as if a few suits inside the beltway are so prescient and wise as to determine exactly which buttons to push and which levers to pull. (Atlanta Journal-Constitution -- Opinion)
Bangers and cash Aug 25, 2009
That said, that, given the depth of the crisis a few months ago, the boost to total demand prompted by the scrappage scheme did at least help to avert a Keynsian liquidity trap , leading to a depression. The green benefits are also hotly contested. (The Economist)
Business.view: Clunky but effective Aug 5, 2009
The boost in demand that the rebates have brought about is exactly the sort of stimulus that is urgently needed to escape what John Maynard Keynes called a liquidity trap ... Tackling the liquidity trap answers one criticism of the scheme that it is simply pulling forward demand from the future, rather than creating additional demand ... That does not mean that all consumption is good, nor that there should be a return to the unsustainable debt-fuelled consumption that helped cause the current... (The Economist)
Teens, Models, Bailouts Meet Lucky Leaders: Alexandre Marinis Jul 17, 2009
75 percent enabled the to slash rates aggressively, preventing an economic meltdown without risking a liquidity trap. Reserve requirements on Brazilian banks, which were among the highest in the world -- topping 45 percent for cash deposits -- could finally be reduced. (Bloomberg -- Columnists)
Wonk Watch 7.14.09 Jul 15, 2009
The main differences between the two systems are their treatments of the liquidity trap, says Krugman, but both have theoretical aporias beyond their takes on monetary policy, he adds. Felix Salmon agrees with Nassim Taleb but disagrees on how everyone should get clean. (Slate)
PAUL KRUGMAN: Obama faces stimulus trap Jul 14, 2009
For this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit. When this happens, unconventional measures are the only way to fight recession. (Fresno Bee -- Opinion)
Cash crunch: Developer Mike Mastro's troubles mount Jul 11, 2009
He s a good example of a person with experience who is caught in a liquidity trap. Mastro did not return phone calls requesting comment for this article. (Puget Sound Business Journal, WA)
Did the Banks Eat Our Cookies? Jul 4, 2009
What is a liquidity trap, and how scared of it should we be ... What is a liquidity trap, and how scared of it should we be ... What is a liquidity trap, and how scared of it should we be. (Slate)
The Big Money Jul 4, 2009
Explainer What is a liquidity trap, and how scared of it should we be. By Gabriel Beltrone. (Slate)
Only `Swine' I See Are Bankers as Gloom Sets In Jun 24, 2009
Liquidity trap, anyone ... Inflation, for example, is less of a threat in a liquidity trap. (Bloomberg -- Columnists)
Its Finished, John Lanchester, The London Review of Books Jun 16, 2009
When the market returns to normal functioning, you will be able to sell your house for its true value; so you arent really insolvent, youre just caught in a liquidity trap. In practice, all you would do, in the above example as long as you werent really You Ltd, in which case you might well be under a legal obligation to go into receivership would be to simply ignore the question and keep going. (Harper's Magazine)
Paul Krugman: For a full recovery, economic policies can't revert to norm Jun 16, 2009
For this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit ... The first example of policy in a liquidity trap comes from the 1930s ... But a rising monetary base isn't inflationary when you're in a liquidity trap. (Sacramento Bee -- Opinion)
Wonk Watch 6.15 Jun 16, 2009
That's because we're in a liquidity trap, a complex scenario where central bank monetary policy doesn't function as intended (more on why to come soon). He also invites Obama's critics, to shut up about the inefficacy of the stimulus in creating jobs and. (Slate)
Gingrich, another comical choice for mouth of GOP Jun 16, 2009
gun961960 wrote on Jun 15, 2009 8:36 AM:" Food for thought:The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, its dj vu all over again literally.Skip to next paragraph Fred R. Conrad/The New York TimesPaul Krugman Go to Columnist Page Blog: The Conscience of a Liberal Readers'... (Helena Independent Record, MT)
Inflation `Cure' Exposed When In-Laws Move In May 22, 2009
That type of thinking is nothing more than an updated version of Keynesian liquidity trap argument, he says, referring to the idea that central banks become impotent when nominal rates approach zero. And it makes about as much sense. (Bloomberg -- Columnists)
It's `Do or Die' Time for Second-Biggest Economy Apr 10, 2009
The amount could be considerable thanks to the liquidity trap in which the Bank of Japan finds itself. Jerram, for example, says the BOJ would need to get its 0. (Bloomberg -- Columnists)
Bank Negara can further reduce rate if necessary Mar 28, 2009
As it is, some of these developed countries are already facing a monetary liquidity trap as their extremely low interest rates have failed to revive economic growth and there is still no sign of an end to the credit crunch they are facing. In the case of Malaysia, however, although Bank Negara has already frontloaded a cumulative 150 basis points cut in the overnight policy rate (OPR) from 3. (The Star Online, Malaysia -- Business)
Massive cash injection into U.S. economy may inhibit world recovery Mar 26, 2009
This will give rise to a huge liquidity trap that will render the government's cash injections - however huge - useless. And this is not the only problem the U.S. government's excessive cash injections would bring. (Xinhuanet, China)
* Inflation is not the risk, Japanese-style deflation is Mar 2, 2009
Ever since Japans banking crisis began in 1990, the country has been in a liquidity trap, with central bank rates close to zero, and from 1998 to 2005 the price level declined by more than 4 percent. Japanese governments have tried to overcome the slump with Hansens recipes, issuing one Keynesian program of deficit spending after the other and pushing the debt-to-GDP ratio from 64 percent in 1991 to 171 percent last year. (Taipei Times, Taiwan -- Business)
Sterling dented by talks on banks losses Feb 26, 2009
If deflation expectations were to rise, it would use not only further rate cuts but also the exchange rate to escape the liquidity trap, she said. The krona fell 0. (FT.com -- Markets)
Central bank policy shift a sign of Chinas economic weakness Feb 21, 2009
Zhang Jianhua, head of the central bank s research department, appeared to have had discounted bill financing in mind when he warned on Thursday that further interest rate cuts could create a liquidity trap ... If we continue to cut interest rates, a liquidity trap could result. (The Star Online, Malaysia -- Business)
Evans-Pritchard: Europe In Depression Right Now Feb 21, 2009
Were in a once-in-a-century crisis, a classic Keynesian liquidity trap where the government needs to step in to some degree and replace the private economy temporarily with demand. . (Newsmax)
Professors weigh in on American Recovery and Reinvestment Plan Feb 20, 2009
"This is mainly because conventional monetary policy lost its effectiveness in the current situation."The economy is in a liquidity trap. Banks are hoarding cash and are reluctant to lend," Senyuz said. "The U.S. consumer is heavily battered by the reduction in its net worth and this does not leave much room for stimulating consumer spending by lower interest rates. (The New Hampshire, NH)
Obama's housing plan: The Michelle Malkin critique Feb 19, 2009
But to people like Malkin and the House Republicans with whom she is currently so enamored, the idea that the economy could possibly be in a liquidity trap in which a sharp collapse in spending incites a further downward spiral for which there is no fundamental economic necessity is rank heresy. They cannot allow themselves to accept that possibility, because it provides a rationale for government action. (Salon)
US Recession: Spend Now, Save Later Feb 19, 2009
British economist John Maynard Keynes saw that monetary policy, with lower interest rates, would not work, because of the liquidity trap: Faltering demand discouraged investment even when debt carried little cost. Consequently, he ordained demand stimulus via fiscal policy, even if contrary to conventional wisdom, it meant rising public deficits and higher public debt. (YaleGlobal Online Magazine, CT)
Taxpayer trillions fuel a monster mess Feb 16, 2009
David HirstFebruary 11, 2009. Other related coverage. (Sydney Morning Herald -- Business)
* GDP to contract 6%: Morgan Stanley Feb 11, 2009
If not managed carefully, a vicious cycle can develop from deflation, a liquidity trap and capital outflow, Lam said. Under such a scenario, even record-low interest rates will not revive the economy. (Taipei Times, Taiwan -- World)
