In General, Why should COSTS ever exceed PROFIT MARGINS? Granted, in a short term borrowing environment every firm borrows to cover short term shortfalls in cash flows. But, as a longer term formula, why and how can or should Fed Interest Rates ever be allowed to exceed Gross Domestic Product increases? Assuming that there is no free lunch: "EVERYONE" is a borrower if "ANYONE" is a borrower. Of course not everyone is a borrower, but our share of the costs passed on to us by our suppliers, or conversely the friction in sales where there are other costs being incurred by our buyers, SPREADS COSTS across the economy. That is why, under the principle of spreading costs, Federal Interest Rates should NEVER exceed 4% until such time as GDP exceeds 4% economic growth....if we lived in a perfect economy, which we don't and looking at it lately, we never will. That is why even retroactive tax cuts, may be needed, across all brackets and all margin rates, that is, a major change in Fiscal Policy, to fix the Federal Reserve's mistaken monetary policy of the last 18 months that hiked interest rates and killed the greatest boom market and created the biggest bust market since the great depression of 1929-1933.
I am,
Truly your$,
-Crystal Ball |
