Just a quick comment on the bank rate cut today if we get it. Every Tom , Dick and Harry tells us that we should get a cut. Just listening to a guy from the C.D.Howe institute confidently proclaiming this kind of nonsense. Anyone who has red Keynes, Hicks etc. or otherwise taken the trouble to superficially understand a few things about monetary policy should be familiar with concepts like the liquidity trap. Essentially what that says, without getting into LM and IS curves, is that at some point the demand for money, liquidity becomes inelastic. What that means is that the market does not care. It happens when your kid refuses to mow the lawn when you raise his pay from $5 to $10. This is what is known as pushing on a string!
So they did it, â€œsteadying quantitative easingâ€ it is called. This is the 7th cut in a short period. Was not being insane defined as doing the same thing and expecting a different result???