Trawling through the archives…
Suppose you have a crystal ball, and are given one peak at the future, say May 2011. But you are only allowed to look at one variable—and it’s not the Dow, it’s the fed funds rate. Now suppose I tell you the following, it will be one of these two numbers:
…If I looked into the ball and saw 0.25% fed funds rates in 2011, I would have a sickening feeling—like I’d been punched in the solar plexus. Krugman would be right, we’d be another Japan.
Its no longer May, its June, and we remain in The Little Depression.