October 11, 2009
Britain's Central Planning Death Panels
October 11, 2009
Free Market M.D.
October 11, 2009
Economies of Scale in Compliance
October 11, 2009
Balan's Challenge
October 10, 2009
The Pleasure of Telling Others What to Do
October 10, 2009
Gonick the Great - and How He Could Have Been Greater
October 9, 2009
More Scott Sumner
October 9, 2009
Not From The Onion
October 9, 2009
Thoughts on a Second Stimulus
I don't buy the "vigilante" theory. The bond market is simply discounting the obvious: the Fed will raise interest rates soon. The Fed knows that they cannot keep negative real short-term rates forever - the bond market knows this too.
Higher expected inflation, anyone?
Would you accept the proposition that financial funds are a market product dependent upon the level of Profits enjoyed by Business, with foreign investment and Government deficit spending drawing down heavily upon those profits. One must remember these fund catagories are not like any Central bank, they are made by private investers who must have the excess cash. These funds deminish, and fund markets must offer higher interest rates to capture what excess funds remain. lgl
The Fed is behind curve,deliberately.It's downplaying its inflation responsibilities in favor of economic stimulus and will not change direction while there is any chance a course correction interferes with the election.This means it will lose credibility when it finally does move which could lead to a replay of 1994. Rates are going up--a lot.