Posted on September 14, 2015 by Martin Armstrong
My advice to the Fed is YES – Raise the lending rate, but do not raise the excessive reserve rate they pay banks. Or lower the excessive reserve rate to zero and leave the lending rate unchanged. This will have the desired impact of forcing the banks to get real. If the Fed raises the rate which includes the deposit rate on excess reserves, the banks will only deposit more money and not lend. This would encourage hoarding and further the deflationary cycle.
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