theartofthepossible.net — But when central banks, through their manipulation of the money supply, artificially lower the interest rate, then the signals get distorted; investors are led to act as though consumers have a lower time-preference than they actually do. Thus investors are led to invest in longer-term projects that are unsustainable,
Oct 11, 2008 View in Crawl 4
flossdailyOct 11, 2008
Whatever the cause, the solution is BETTER REGULATION not DEREGULATION.Government is the ONLY force that protects individuals and small businesses from the greed of big business. Smart regulation is necessary now more than ever.
noodsOct 11, 2008
Mis-management is always the excuse. It is always that we just did things the wrong way.
berkanaOct 11, 2008
The title is misleading. I think blaming regulation is incorrect; blame properly belongs with fractional reserve banking, not with regulation or deregulation. With our present system of fractional reserve banking, some regulation would have helped.But I do agree, major monetary contractions do not happen by accident; they are pre-arranged by central bankers, who hide their motives while rowing the money supply by manipulating interest rates. However, calling this kind of manipulation "regulation" is incorrect; it is more properly called abuse.Interest rate manipulation causes debt-related crashes like what we're experiencing now for the reasons explained in "Money as Debt". The culprit is that the money we have in circulation was all borrowed into circulation, and has to be paid back with more than was borrowed. If the banks make it hard for people to borrow money (whether by rejecting loans, or by discouraging borrowing by imposing high interest rates) the repayment of existing debts contracts the money supply while no more money is put into circulation through new debt:<a class="user" href="http://www.youtube.com/watch?v=_yvRZoM-2r8">http://www.youtube.com/watch?v=_yvRZoM-2r8</a>
dymaxionpzOct 11, 2008
Uh, yeah, just like FDR ended the great depression, Jim Crow laws & the Separate But Equal decision protected minorities, lets not forget the ever successful wars on Drugs, Crime, Poverty, etc. Let me know what smart regulation is because we've never seen it.Usually, as in the case of education, Govt is the monopoly that stands to gain from regulation.Govt is an extortionist, not a protector.