Saturday, November 12, 2016
ZIRP/QE hands election to GOP
The Democrat Obama administrations (8 years) have presided over the lowest policy interest rates in the post 1971 era of our return to a numismatic system of currency.
Total issued US Treasury securities over this period have averaged about $14T while the policy rate has remained at 0.25%.
If instead of ZIRP and QE we ran the risk free rate at a more typical 4%, it would have resulted in an average additional leading USD flow of $500B per year of interest income in the USD system on top of the approximate $4.2T leading flow experienced or about 20 - 25% more.
If those were the conditions we'd have experienced, I'd say there would have been a Democrat victory in this year's presidential election.