The Unnatural Rate Hypothesis

Why economics is failing as a “science”, people allow ideology to get in the way of simple facts. And when the facts fail to validate their models of reality, well…reality is wrong.

In short, the notion that rates are low only because the Fed is holding them down by “gobbling” up debt is clearly refuted by international evidence, clearly refuted by the behavior of rates over time, and logically flawed. All of that makes it perfectly suited to become part of the conventional wisdom, so thoroughly accepted that it is mentioned only in passing.

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