2012 07 15

 

 

2009 02 10                                           http://NCAD.net/NIRP.htm

Banking & Credit Solution

How to restart global finance and save our children.

Quoting Nobel Laureate Krugman in 2009 jan 26 NYT.

Itís true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isnít, because weíre in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.
Thatís why weíre talking about large-scale fiscal stimulus: itís whatís left in the policy arsenal now that the Fed has shot its bolt. Anyone who cites old arguments against fiscal stimulus without mentioning that either doesnít know much about the subject ó and therefore has no business weighing in on the debate ó or is being deliberately obtuse.

 

Oh, really?  Non-Nobel-Laureate here begs for the opportunity to illuminate the bloody darkness.  Thus far, the Nobel-Laureate-approved solution is to blindly shovel citizen progeny blood to greedy Banks... and hope....and wait....  still...no lending...

The power of zero. 

Krugman's monetary policy economics apparently has no definition beneath the floor of zero, as in We can't have interest rate less than 0.  But we have learned to say

YES we Can!!  Let the Fed provide Funds at a rate BELOW ZERO!

Suppose i borrow money today from Bank, say $10,000 at 0%, to be repaid in 60 months.  That means, each month, Bank receives repayments from me of $167.  The Fed provides the funds to the Bank at interest of -5%.  So the Bank repays the Fed monthly payments of $146.  Thus the bank is earning money at $21/month/$10,000.  $2.03 per $1000.  $2,204.57 per $1M.

I am happy.  The Bank is happy; and the Fed is happy because the economy is growing -- in direct proportion to the investment made by the Fed.  And tax revenue is now coming in to finance this negative-interest-rate-program NIRP.

In the meantime, our children are not bearing the burden of trillion-dollar fiscal baloney.  The downward spiral has been reversed to an upward spiral.  Foreclosures subside, folks buy cars.  Businesses invest and sell and hire...   Crisis Resolved!

Advantages:

_______________________________________________________________

500-character summary to enter at:  http://www.whitehouse.gov/contact/

Negative-Interest-Rate Program NIRP
solves Banking Crisis, re-ignites global economy.
Let the Fed provide Funds to Banks at a rate BELOW ZERO!
Banks earn (unencumbered) money by Lending, transparently.
Borrowers get loans at low(no) interest rate -- spurring spending.
Every $ spent is based on free, business-prudent calc to increase production.
Our children are saved fiscal trillions baloney.
Re-invigorated market economy generates tax revenue to pay for NIRP.
resolving unemployment, foreclosures, etc.