Links: 2008-12-18 – more on ZIRP

| 18 December 2008 15:41

Now that the United States has cut its interest rates to Zero and Ben Bernanke has helicopters flying over Wall Street, the question is: what happens next and who’s following the Fed to zero? There are a lot of different answers.

  1. The Dollar is going to get pounded – disorderly fall.
  2. The British are next to ZIRP. The Pound is dead meat.
  3. The Swiss are next to ZIRP.
  4. The Japanese are going to start selling Yen into the currency market.
  5. The Europeans have huge exposure to Eastern Europe and those bets are about to go pear-shaped.  The Euro will tank.

Take your pick.  It’s anybody’s guess really. We are in unchartered territory.

ZIRP posts

Bloomberg.com: Pound Sinks to Record Against Euro on Zero Interest-Rate Bet

Brad Setser: Follow the Money » That was fast ….

Economist’s View: Why Didn’t the Dollar Crash?

Paul Kedrosky: ZIRP-ishness Around the World

FT.com | The Economists’ Forum | Quantitative easing: Lessons from Japan

Cassandra Does Tokyo: Zero – The Loneliest Number?!?

Financial Sense Online Market WrapUp with Chris Puplava 12.17.2008

Other stuff

naked capitalism: New York Times Pulls Punches On Wall Street Bubble Era Pay

Bloomberg.com: Keynes Revival Makes Cato a Lonely Hearts Club: Caroline Baum

Paul Kedrosky: Unintended Consequences and Deposit Insurance

p.s. – anyone know what’s happening at Glencore. I see their CDS spreads going berzerk and talk about lack of liquidity. E-mail me if you have any answers.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Related Posts
More About: ,

«
»

1 Comment

  1. avatar Charlie says:
    19 December 2008 at 07:54

    My vote is for the British going to zero next. We have an economy a lot like yours: high debt, huge government deficit, huge current account deficit, housing crash. See you at zero soon.