| Reuters
Despite virtually zero interest rates, despite QE1 and 2 and Operation Twist, and even despite a rush to supposedly safe Treasuries which have driven financing rates lower without help from the Fed, still we have an economy which fails to thrive.
The Fed can introduce all of the liquidity into the economy it likes, but it cannot force banks to lend or people to borrow. The central bank has tripled the monetary base since 2008, but the speed at which money circulates through the economy has slowed, a sure sign that higher doses of the same medicine won't be fully effective.
"We think that the global forces behind deleveraging have more firepower than all of the world's central banks and governments together, and that deflation is a much more likely outcome than a major inflation," fund managers Comstock Partners wrote in a June note to clients.
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