“The Liquidity Trap may soon be over?”

Back in January on Greg Mankiw’s Blog this blog post caught our eye.  The second last line in the post most relevant.

“At the current inflation rate, the unemployment rate needs to drop to 8.3% from the current 8.5% for the model to signal positive rates.”

Well folks, the stated unemployment rate on Friday was 8.3%!

This statistic along with the action occurring in the US financials (see our Goldman piece), things are looking up!

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