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Politics : Welcome to Slider's Dugout
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To: Rarebird who wrote (2152)8/7/2006 12:12:45 AM
From: dfloydr  Read Replies (1) of 50729
 
I don't get this Fed.

Art Laffer, author of Reaganomics, used to argue vehemently that inflation is the result of too much money chasing too few goods. Ensuing policies based on his arguments put an end to the inflation we saw in the Carter years.

Interest rates have little to do with the core inflation. In fact rising interest rates mean rising costs for every business from sausage makers to home buyers to muni bond issues, etc.. Rising rates contribute directly to inflation.

This Fed is flooding the world with money supply on the one hand, while raising rates on the other which to some degree will slow production of domestic goods or delivery of foreign made goods.

Fretting about inflation while conducting policies of ... more money ... and fewer goods ...??? Hmmm!

Art Laffer where are you?
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