GoghGoner wrote:If ZIRP is to blame for global deflation, I can't imagine what -ZIRP will do. I guess it may be continuum and not an abrupt change but paying somebody to take money still seems just a little ludicrous.
ZIRP is not the cause of deflation. ZIRP is the reason why we aren't at 5%+ deflation RIGHT NOW. And yes, they very much can and will do negative interest rates, even substantial negative interest rates to keep that deflation monster at bay.
They are using it to mask a severe, essentially permanent depression. And its working. We aren't starving. Grain is making it to the grocery store shelves; and the lights and internet are still clicking along.
Fortunately, the people that make the policy, have access to real time numbers, and the computational capacity to use those numbers. They will not be moved by the latest conspiracy theory of the day. They will not succumb to people who think money serves a purpose other than to move grain from field to pantry.
ZIRP will continue till the end of time if necessary, but there WILL NOT BE significant deflation. Bankers aren't perfect, so yeah, they missed by a small nibble here and there and let some tiny negative inflation numbers show; but they'll stomp them hard, and they have no limits to how hard they can stomp.
That said, we're on a doomer forum here; we don't have to pretend that these numbers reflect true growth; we can be content that powerdown is engaged, that the wealthy will end up owning almost everything as a result, but that the grain will continue to move, and you and I will still be able to buy a twinkie at the grocery store; whether that twinkie is labeled as $1 $10 or $100 is completely unimportant. As long as it is an increasing price.
In our world. There can be no true growth anymore.