Re: CB interest rates I realize this is controversial, and many economists still disagree. I do think that wind is blowing in my direction though. IMO, this i

Re: CB interest rates I realize this is controversial, and many economists still disagree. I do think that wind is blowing in my direction though. IMO, this is Monetarism's big mistake. Now that floating exchange rates are the norm, this becomes more clear. Interest rates are not constrained to a narrow range by market realities. CBs can set them to 0%, as we now see. They could set them to 1000% if they chose, since CBs can print arbitrary sums to pay interest. Interest rates have consequences in the economy, but not restrictions. Those exist in a pegged currency world, not in floating exchange world. If depositors don't want to own CB bonds, they can redeem them for dollars/euros. The CB will always have dollars/euros available to make good on that.