Salient to Investors:
Paul Krugman writes:
- Bill Gross’s fall is a symptom of depression denial syndrome: the refusal to acknowledge that the rules are different in a persistently depressed economy.
- Since 2008, the US has been stuck in a liquidity trap – a desired saving glut with no place to go. Because the government is not competing with the private sector who do not want to borrow, deficits need not cause interest rates to rise.
- People who were predicting soaring inflation and interest rates 5 years ago have not changed their prediction, yet Bill Gross is pretty much the only major deficit hysteric to pay a price for getting it wrong.
Read the full article at http://www.nytimes.com/2014/10/03/opinion/paul-krugman-depression-denial-syndrome.html?_r=0
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