ZIRP or ZAP? Will the Fed's 'Zero-Interest Rate Policy' Return, and Will It Work?

Only the wealthy will benefit from ZIRP, and the benefits of "the wealth effect" and "trickle down" have not just diminished--they're now negative. Welcome to the era of ZAP.

Correspondent Scott suggested I consider the possibility that the powers that be will respond to a weakening of the economy by pushing interest rates toward zero, reinstating ZIRP--Zero Interest Rate Policy. The purpose of ZIRP is to reduce the costs of borrowing money as the means of goosing borrowing-and-spending and inflating another credit-asset bub…