Eventually, rates will rise

If they had any economic sense at all, the American and European central banks would have been raising rates sooner rather than later:

Russia lifts rates to 12pc to save rouble as crisis deepens

Russia’s central bank has raised interest rates a full percentage point to 12pc to prevent a collapse of the rouble following a day of mayhem on the Moscow markets, prompting concerns that the financial crisis may be spiralling out of control. The surprise move last night came after the authorities had spent $7bn of foreign reserves in a matter of hours trying to defend the currency, at a lower level. The central bank has now spent $84bn of its reserves over the last month…. Expecting trouble, the Kremlin has mobilised the police to crush dissent.

It seems there are two models for the American future, the Russian one and the Japanese one. Neither looks particularly appealing, but they’re both to be preferred to the Weimar Republic’s hyperinflation.