Carnies

[vagabonddreamer]

my fault...i didnt explain myself well..i do understand that interest rates are not free market driven...i guess my question pertained more to your statement that you thought interest rates should be raised...WHOM should do that and how should the rate be decided...and how long should it be pegged at a certain rate...i see this as regulation...it would be a very interesting case study to look at free market results of interest rates...i remember my father had a 20 yr mortgage at 3.5%...this was prior to lots of govt interference...the rates prior to the seventies were very low if history serves me..(not that i remember the sixties...lol)...

dont you think that the interventionist policies only exacerbated the recession/depression that was already underway?? the impression i get from reading about the depression was that the major factor attributed to its "ending" was complicit agreement by the four "feds" to go off the gold standard??? is that not correct?? i guess one of the problems is that operating on the gold standard leaves you NO room to maneuver if you WANTED to...there was a tremendous amount of pain during the depression...i wonder how much more there would have been had no one intervened...

the thing i find interesting...is that the economy is cycling...DESPITE what people are trying to do...i wonder if the economy is actually stronger (not good strong but overbearing strong) than we give it credit...we can agree that "gubmint" financial/economic experts have handled the entire thing incorrectly...absurdly so...yet...life has gone on...the earth rotated so that it seemed like the sun rose and set...cattle still escape fencing no mater HOW much work you do mending it...and...the world might survive this "recession" despite how badly we have handled it...maybe you are right fransico...maybe the free market is really the entity in control?? vs

[pilpilsner]

Pars,i was addressing vaga.

Gold standardard and the thirties?
The us government confiscated gold from its citizens and the price was doubled from 20 to 35 dollars to inflate away its external debt obligations.

Interest rates.
The free market sets interest rates in the bond market which the government and central bank is obliged to follow.

Which leads us straight to "quantitative easing",this is public money that is printed to buy bonds.A.K.A-debt monetization.

Now if you have spent some time on this,this is where it gets scary.

[Fransisco]

"dont you think that the interventionist policies only exacerbated the recession/depression that was already underway??"

Yes, the interventions took a bad situation and made it worse by dragging the problem out. Ever hear of the depression of 1920? Probably not, because it was over so quickly. The government did next to nothing and what it did do was cut tax's and spending.

http://www.meltingpotproject.com/mpp/2009/02/the-great-depression-of-1920.html

It was bad for folks in 1920 but it was much worse during the dirty 30's because of the notion that government just had to do something. This is why I don't have a lot of time for the bleeding hearts who claim they just want to help the suffering masses. Their idea of help creates a larger number of people who have to suffer over a longer period of time.

[Fransisco]

pil makes a good point about the bond market, I hadn't thought through it far enough down to that level.

It is the central banks that decide what the prime rate should be. But they have to borrow the money from somewhere. Once upon a time we borrowed it from ourselves, now since we offer such lousy savings rates we have to borrow it from other folks.Which is getting harder to do

"The recent failure of British Treasury auction, two similar flops in Germany, and a very near miss in the US all prefigure a world with too much debt and too few sugar daddies willing to cover it."

Demographics also play into this whole mess in a big way. Take a look at this...

http://209.85.173.132/search?q=cache:http://www.steynonline.com/content/view/1996/28/

[parsley]

pily hit it right:

"..us government confiscated gold ...citizens.. .35 dollars ...debt .."

Now marry it with franny:

"demographics"

There is a potfull of gold from tax-raping the demographically challenged's rrsp's coming due.

And don't think that greedy fingers aren't figuring out the best way to increase the tax rates ...to, er, pay down the debt once again.

Same routine, different tools.

Tax-protected cash is not safe in the hands of Ottawa.

Take the early poison and cash em in every chance you get?

Yup.


Pars

[Hopperbin]

Hey Pars our tax sheltered savings are going to get 3 wammies.
1 They are devalued.
2 They will be taxed higher.
3 They will be GST PST to death.
4 For anyone that drinks the booze tax will also go up.

Its no wonder we cannot afford to have kids these days.

[parsley]

The best investment is tio buy a Mona Lisa, and invest in a Leonardo or two.

And about 2000 cows. Yup, cows. Paes

[parsley]

And invest in a still.Got one?

Kids don't need much except lots of love.

Got some of that? Pars