On Feb 25, 2012, at 11:29 PM, nathan tankus wrote:
> Second, I would dispute that setting the federal funds
> (internationally, and more accurately, referred to as the interbank
> lending rate) at zero is an "easy money" policy. I think the
> relationship between interest rates and the rate of money creation is
> weak at best.
It's manna to speculators (see: the Greenspan years). Borrow at 0%, buy T-bonds at 2% (or higher, if inflation picks up). You'd have to regulate all kinds of other things to compensate.
Doug