Tomorrow I leave for the Rocky Mountain Economic Summit, Jackson Hole, Wyoming. I'll be hoping to get some answers to the following questions:
Why are long-term interest rates so low?
- The federal debt is huge. Typically that would drive interest rates up (and crowd out private investment).
- We have had massive "Quantitative Easing" i.e., monetary expansion. Ordinarily that would push interest rates down now but create huge expectations of future inflation, leading to much higher interest rates in the long run. But have we really had all that much QE?
- How much additional liquidity is being pumped into the US economy? How much liquidity comes from shadow banks? How much comes from Asia?
- If there's a credit crunch happening in China, to what extent will that lead to a drying up of the supply of lendable funds?
Lots of questions. I hope there's time and an opportunity to get some ideas about the answers.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.