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To write about Roubini's misses and not mention: 1. quantitative easing [which had the effect of propping up the stock market], and 2. the creation of a backd
by patrickgzill 16y ago
To write about Roubini's misses and not mention:
1. quantitative easing [which had the effect of propping up the stock market], and
2. the creation of a backdoor funding initiative to subsidize the investment banks on the backs of all USD savers, by pretending they are regular banks, allowing them to borrow at the nonsensical rate of 0% (or nearly that) [allowing banks to make billions per year nearly risk-free, thus keeping them from going under]
betrays either the article writer's dishonesty, or lack of knowledge on the subject.
- narrator 16y agoMainstream Economics assumes the monetary system and government policy are some abstract and perfect continuous function. As perfect example the IS/LM curve. They aren't though, they can radically change the rules anytime they want to throwing years of equations out the window. Imagine the utter theoretical chaos that would be caused if the U.S defaulted on its bonds because Treasuries represent the "Risk free rate of interests" variable present in perhaps thousands of economic models.