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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: sea_urchin who wrote (25705)8/12/2007 10:50:22 AM
From: philv  Read Replies (1) of 81186
 
I just came back from an overnight visit to relatives who live on Whidbey Island in Wash. State. It was a short visit for sure, but I did not get any sense of an impending doom. The freeways were crowded with expensive cars and SUVs as before, and people are living as before. The border crossing took 11/2 hours with long lineups extending well into the Canadian side.

Good Thread discussion on what is happening on the economic front. So all the banks have injected a few bucks to calm the financial markets. I am unsure exactly where this money is supposed to go and how it will get out into the public. From what I have read, lenders are extremely reluctant, and have suddenly found "religion" in their lending practices which they had abandoned with the FED's approval.

I do think this is an important change, because our economy depends on an increasing supply of money. And money is created and distributed through debt. Just to stop and hold the money supply at present levels would cause major financial problems, and shrinkage is unthinkable. So I wonder what they will do to keep the party going. If the equity and financial markets cannot be contained, I would not be surprised if the FED and the rest of the world's CBs would respond by lowering interest rates again. And inflation would be right back on track again.

The fly in the ointment that is clouding the water for me is the matter of wages which are severely lagging real inflation. Should workers rise up and demand higher wages, what then will the FED do? As long as wages are contained, inflation is absorbed by the population without undue cost to business and government.

Whatever the solution or outcome, one thing I am convinced of is that we all will pay in the end. And that means a lower standard of living.
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