More “banks lend out the reserves!” belief… i.e. cognitive reification of Accounting abstractions… this is ofc not unique to USD zombie China…
China’s central bank cut the amount of cash most banks must hold in reserve in order to boost lending in the economy as growth starts to wane https://t.co/624rGOniv6
— Bloomberg Markets (@markets) July 9, 2021
They appear to be making the same mistake as the West: i.e. assuming that inadequate demand must stemm from some strange inability of the market to pitch interest rates at the free market level. Where's the evidence for that? There ain't none.
ReplyDeleteInadequate demand stems from lack of consumer or business confidence, or maybe a fall off in exports due to problems in other countries. I.e. the solution is simply to have the state create and spend more fiat (i.e. base money) ionto the economy, and/or cut taxes.
“ They appear to be making the same mistake as the West:”
ReplyDeleteThat’s all they ever do Ralph…. Hack the west… USD and EUR zombies…
Don't question the faith.
ReplyDelete