The experience of the Great Recession and its aftermath revealed that a lower bound on interest rates can be a serious obstacle for fighting recessions. However, the zero lower bound is not a law of nature; it is a policy choice. The central message of this paper is that with readily available tools a central bank can enable deep negative rates whenever needed—thus maintaining the power of monetary policy in the future to end recessions within a short time. This paper demonstrates that a subset of these tools can have a big effect in enabling deep negative rates with administratively small actions on the part of the central bank. To that end, we (i) survey approaches to enable deep negative rates discussed in the literature and present new approaches; (ii) establish how a subset of these approaches allows enabling negative rates while remaining at a minimum distance from the current paper currency policy and minimizing the political costs; (iii) discuss why standard transmission mechanisms from interest rates to aggregate demand are likely to remain unchanged in deep negative rate territory; and (iv) present communication tools that central banks can use both now and in the event to facilitate broader political acceptance of negative interest rate policy at the onset of the next serious recession.

OK, “Hey Half Dollar, you big dufus, that paper is from April of this year!”.

Yeah, thanks for bringing that to my attention.

I’ll see your April paper and raise you a McAlvany podcast from July:

Because Fed Heads are talking ZIRP again this week:

My wife is a professor of nursing, and she says one of the best things you can do for your children is to get them vaccinated. It’s better to deal with the short-term pain of a shot than to take the risk that they’ll contract a disease later on.

I think about monetary policy near the zero lower bound—or ZLB for short—in much the same way. It’s better to take preventative measures than to wait for disaster to unfold.

And the IMF has been getting ready to help with the slaughter.

So if you’re not up-to-speed on their preparations, now you can be.

IMF’s telling us about “readily available tools”, used “whenever needed”.

“Needed” to them is the exact opposite of “needed” for the people.

Free market and sound, prudent monetary policy be danged.

Negative interest rates may be “needed” very soon.

Or so the world’s central bankers are telling us.