Liquid Animals

Why Interest Rates Tell Lies About Inflation, Growth And Just About Everything Else - Forbes: "Yes, interest rates tell us the truth about ourselves, and that’s exactly the problem. You see, we don’t want to hear the truth about ourselves. We can’t handle the truth. And like any dysfunctional system that can’t handle the truth, we need an enabler.

Our chief enabler is our own central bank. When credit is short because capital accumulation is not occuring, our central bank creates credit out of thin air. When savings rates rise, but savers hoard, rather than invest, the central bank pushes its newly created money out of short-run credit markets and out into the whole yield curve. They don’t try to deal with the underlying problem, which is that holding high cash balances are a rational response to anti-wealth creation policies and regime uncertainty. They simply declare the existence of an unexplained “liquidity preference” because of a lack of Keynesian “animal spirits” and tell us that the only way to get out of a “liquidity trap” is easy money, and then they rev up the printing presses once again, as they are doing now.


But if large businesses are holding on to money, they have a reason to do so. And it’s not “greed.” Greed doesn’t cause you to save money in cash accounts yielding nearly zero percent. Fear does."

I can't recommend this one strongly enough. A short but strong RTWT.