Home > Mainstream failure > Keynesian zealot-zombies bump into each other

Keynesian zealot-zombies bump into each other

Can these guys get their stories straight?  Keynesian zealot, Paul Krugmaniac, has been persistently and robotically pushing the view that the long-end of the T-bond market has been held down because of “market forces” (i.e. low inflation expectations and the risk of dreaded debt-deflation).  This “theory” then allowed him to argue that there was no risk of higher yields from massive Keynesian “stimulus” (read: cancerous) spending.

This ridiculous hypothesis is comprehensively de-bunked by another Keynesian bureaucrat at the Fed:

Mr. Sack’s group estimates that the Fed’s purchases of $300 billion in long-term Treasury securities earlier this year helped to push yields on 10-year Treasury notes down by about half a percentage point. Some critics have argued that the Treasury purchases didn’t have the intended impact of pushing rates down. But Mr. Sack – a long-time proponent of such purchases – said his estimate is supported by regression analyses by the Fed. Purchases of mortgage backed securities, he says, pushed those rates down by a full percentage point.

It’s embarrassing when these zombies bump into each other.  But it’s bound to happen, given all zombies are blind and can’t swerve.  If they try to swerve, they lose a limb.

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Categories: Mainstream failure
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