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The only way a low Fed funds rate will help the US economy is if the US regulates the cross-border flow of speculative funds, thus forcing the bailout and stimulus money to stay within US borders to create jobs locally. It is a simple measure that could be easily implemented by administrative order.
After the 1997 Asian financial crisis, Malaysia imposed currency controls and at first was widely criticized; later it was widely acknowledged as the correct and effective measure to adopt. Germany after 1933 also imposed currency controls and its economy recovered faster than any other.
There is no way to effectively regulate over-the-counter financial derivative trading against global systemic risk without first stopping cross-border financial arbitrage. Anyone who has studied and understood the problem would know that the path of reinforcing capital reserve adequacy is a dead-end against astronomical notional values.
The only way a low Fed funds rate will help the US economy is if the US regulates the cross-border flow of speculative funds, thus forcing the bailout and stimulus money to stay within US borders to create jobs locally. It is a simple measure that could be easily implemented by administrative order.
After the 1997 Asian financial crisis, Malaysia imposed currency controls and at first was widely criticized; later it was widely acknowledged as the correct and effective measure to adopt. Germany after 1933 also imposed currency controls and its economy recovered faster than any other.
There is no way to effectively regulate over-the-counter financial derivative trading against global systemic risk without first stopping cross-border financial arbitrage. Anyone who has studied and understood the problem would know that the path of reinforcing capital reserve adequacy is a dead-end against astronomical notional values.
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