The velocity problem is the intersection of demographic changes (wealth holders are old), corporate tax policies (money is sequestered) and pervasive fear over global economic stability (china).
Negative interest rates cannot change any of these factors, and I question if negative interest rates will force the flow of significant funds into commodities, thus reversing the current deflationary spiral.
If the USGOV wants inflation create it the old fashioned way... incentivize risk taking.
There is no liquidity problem in the United States. Bank & large corporate balance sheets are flush with cash. There is very much a velocity problem.
https://research.stlouisfed.org/fred2/series/M2V
The velocity problem is the intersection of demographic changes (wealth holders are old), corporate tax policies (money is sequestered) and pervasive fear over global economic stability (china).
Negative interest rates cannot change any of these factors, and I question if negative interest rates will force the flow of significant funds into commodities, thus reversing the current deflationary spiral.
If the USGOV wants inflation create it the old fashioned way... incentivize risk taking.