Posted on 03/18/2019 11:52:48 AM PDT by SeekAndFind
There...fixed.
He says this in two different places. First, as long as capital has a return greater than zero, the interest rate will not fall below it. My guess is that he was referring to the "real" rate of interest which takes into account inflation. The only time I can recall negative real interest rates was during the Carter years when the prime rate was 21%. I can't decide if this guy knows anything or is just sloppy in the way he writes it.
Read Keynes. His writing makes no sense. You can only “understand” him and his Ism if you read his conclusions and ignore the inconsistencies and non sequiturs. His argument does not make sense linguistically. Politicians love him because he justifies control by “experts” and the pols are, of course, all experts.
I remember the interest rate on the house mom and pop bought in the mid 70s was like 18 percent!!
Seems like a lifetime ago.
God forbid it ever goes that high again, housing prices will plummet.
For those who haven’t studied the riveting subject of macroeconomics since college – sarcasm, of course
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Yes it has been a while.
To make matters worse, the class met tuesdays & thursdays from 8-9:30 am
Who could ever get up that early to attend class?
I was trying to buy a house back then, and every time I had enough to make the 20% down payment the inflation had raised the prices of housing. Very frustrating time to be sure.
“In the long run, we are all dead.”
Bkmkm
Some say that interest rate spike periods are ideal times to buy. The rate has to peak and come down after the economy is choked off.
That is, if the powers that be aren't endorsing modern monetary theory--MMT--and printing the currency and inflation into the wild blue yonder.
When those deficits have to be paid for in bullion, you can't hide the devaluation of the currency that's occurring.
In this sense Nixon - who took the US off the gold standard- is father of this current mess.
There is no reason to fear Boom or Bust; they are the normal function of a free enterprise capitalist economic system for free people.
Boom or bust; highs and lows; ups and downs are anticipated events in a capitalist economy with a government whose only task is to protect property rights.
Well, it’s a valid point about economic valuation: value declines over time because of opportunity cost if nothing else. Everything we value has a time frame within which we measure it, and when the time frame is long enough, the current perceived value falls to zero.
These, of course, have higher risk, as in mortgage backed securities and corporate bonds.
Low interest rates more or less force savings to be invested on the stock exchange casinos, which is one of the reasons for which they keep climbing.
Not true. Gold has nothing to do with it, nor does the gold standard. The Quantity Theory of Money explains it pretty simply:
M * V = P * Q
where:
M is the supply of money
V is the velocity of money (i.e., its turnover rate)
P is the price level
Q is the level of real output
The velocity of money is remarkably stable and has been for decades. Therefore, if you increase the money supply by 3.2% you need to have a corresponding increase in real output. If the change in real output is less, then prices will increase. AOC’s solution is to print more money! Can she really be that stupid? She is no econ major or Boston University needs to reevaluate it econ major.
My take on his work.. his equations were skewed by his desire to eliminate poverty through socialism.
His idea that a government may accrue debt because it was ‘loaning money to itself’ was the justification for FDR’s spending sprees and is the basis for the huge deficits that are still ongoing.
Kind of like the Global Warming scam.. Get some ‘expert’ in his field to say it is ok for the government to do something and a never-dying monster is created.
Well all of the interest would be deductible, right?
Yeah I guess you can’t go wrong because if interest rates drop the price of the property goes up and if interest rates stay high you’re deducting the interest and paying the same monthly as you would if interest rates were low and the house was 2 to 3 times more expensive
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.