Alas, they can’t. So they need to keep printing money instead:
FT: The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve’s last policy meeting.
The analysis was based on a so-called Taylor-rule approach that estimates an appropriate interest rate based on unemployment and inflation.
A central bank cannot cut interest rates below zero. However, the staff research suggests the Fed should maintain unconventional policies that provide stimulus roughly equivalent to an interest rate of minus 5 per cent.
When do you think Bernanke will wave white flag and admit that concerns about killing the recovery will delay the un-printing of money forever? Well, of course he’ll never admit it–because then China would freak and stop lending us money. Bernanke just won’t unprint the money. So this is why we’ll eventually get hyper-inflation.
See Also: Brace For Hyper-Inflation