What would happen without the FED?

I will ask you the same question......you name me one bubble that has ever formed during a high interest rate and tight money policy period?

 

Define "high interest rate"

 

So it's not a bubble because the Fed's policies are correct now?

 

It means that markets are ultimately rational; infinitely moreso than the arbitrary and capricious top-down planning that economic illiterates and haters of individuality advocate.

Now you're getting it, champ! Now, if we can just get you to understand simply supply and demand, then we'll be on to something.

In other words, you need authority figures to do your thinking for you. But we already knew that!

Such a myopic sentiment has no place in serious economic analysis. Do try harder.

 

I sure thought it was completely rationale that people were speculating in gold and silver in 1980, tech stocks in 2000, and housing prices in 2006, didn't you?

 

Why would you want to ruin such an enjoyable experience?

 

The markets self-corrected, hence they maintained rationality.

 

Well sure, after they reached irrationally high levels, then come crashing down and bring the economy with them. And then they go to irrationally low levels.

Market psychology. It's what drives bubbles. Not interest rates. If interest rates drove bubbles the Dow would be at 20,000 right now and housing prices would be above their 2006 levels.

 

above the "REAL" inflation rate not the bogus fed numbers.

So lets say 10% interest rates!

 

Oh, right, the "REAL" inflation rate, meaning the one you make up.

 

-perhaps seeing how the other side lives he might learn that austrian economics is the way to go

 

its not a bubble because:

A) americans are still net sellers of gold

B) there is still incredible pessimism towards gold as the gold mining shares show us!

 

how about the DOW in 1999


or better yet tresuries or municipals now!

 

Maybe if the government bank wasn't manipulating the price and availability of capital, the market's fluctuations wouldn't be so severe.

Interest rates are the price of capital, and the psychology of investment and speculation is inextricably linked to the price of capital. And the Dow and housing prices are still inflated; the only reason they haven't attained equilibrium is because of low interest rates and fiscal stimulus. Without these extreme measures, the markets would have hit bottom and the real recovery would have ensued.

 

So currency needs to be deregulated and anybody should be able to issue it.

Yeah, good idea.

 

I get it, you can't explain the nonsense you posted. Thought so.

What an interesting economic theory. Markets in short run, irrational. Markets in long run, rational.

If you say it enough times, maybe somebody will believe it.

 

currency needs to be sound...not fiat amd worthless!

 

Please send me your worthless dollars. I'll pay S&H.

 

Yep, a bunch a stuff happens in a complex economy and then afterwards we can evaluate whether it was a good use of capital or a bad use.

Afterwards.

Economic theories that claim after the fact that "bubbles" are irrational, but investing in gold isn't, don't really tell us much and can't predict a thing. So why should anybody listen to them.

 

I already asked him for his worthless fiat currency, so I have dibs.

But he refused. Predictably.

 

Whatever that means.

So your position is that the banks would have sold off ALL their inventory of foreclosed property in one fell swoop in order to hit bottom (but those nasty Feds didn't let them).

I doubt that, for obvious reasons which seem to elude you.

The unwinding of the foreclosed market that resulted in deregulation of mortgage backed securities is going to take a long time, and the reasons are obvious to anybody but anti-gummit types.

 

We let the market allocate food and water. I don't see why it cannot allocate money.

A Nobel Laureate in economics thought so.

A Free Market Monetary System and the Pretense of Knowledge

 

like I said a thousand times.....once the ignorant Joe's line up at coinshops and gold mines sell at rediculous multiples then "YES" we will be in a bubble!

 

I did explain it. Your lie does nothing to change that.

A gross oversimplification of my position, but that's to be expected from an economic illiterate. Markets are sometimes "irrational" in the "short run", but they inexorably maintain rationality via self-correcting mechanisms; therefore, markets are ultimately rational, that is, they naturally trend towards rational outcomes.

If you keep lying, maybe someone will be foolish enough to believe you.

 

Why wouldn't they be?

It is a good thing they are "inflated". The economy is already greatly suffering from low housing prices. Millions are underwater in their houses and cannot sell. Millions have had to walk away from their homes or declare bankruptcy.

Why do you want millions more to be in that position? What possible good could that do to the economy?