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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 362.31-1.8%4:00 PM EST

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To: Haim R. Branisteanu who wrote (44436)12/30/2008 2:35:08 PM
From: elmatador  Read Replies (1) of 217537
 
Here is the proof! C. Cowboy posted Armstrong stated:
contrahour.com

page 12. 'Economic Confidence Model' alternates between Public and Private.

When I say, money -in Brazil- goes to government when interest rates go high (fixed income) and moves to Public with lower interest rates (variable income).

That also explains inflation in Brazil. Inflation kicks in, Central Bank removes money out of the system to cool down the economy. Money goes from Private to Public.

Once interest rates drop, Private takes over and using its dynamism kicks in the economy into high gear. This -last time at 11%- causes bottlenecks into the economy, since it was sent into a growth that overshoots the very capacity of the economy to support that growth.

It must be noticed that this happens in an economy that has more economic activity than capital. Thus capital availablity regulate the economic growth.

Therefore I conclude: The Central Bank (Public) has the capacity to unleash Private to avoid a recession.

This model, cannot be aplied to countries that have more capital than economic activity as Japan has show in the past 2 decades.
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