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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 414.48+0.7%Jan 9 4:00 PM EST
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To: THE ANT who wrote (87507)2/28/2012 3:12:57 AM
From: elmatador  Read Replies (1) of 219208
 
Does low interest rates cause inflation? or if you use tax money lower interest rates do not cause inflation?

Tombini has made no secret of his expectation that the benchmark Selic interest rate will hit single digits this year.
Message 27976475

I am thinking here:
gargantuan income generated by the higher interest rates that causes inflation.
Why?

If many people puts money to fixed income, (government use this money) these earnings come back to the economy.

If many people withdraw money from fixed income, (government cannot count with this money) lower earnings percolate back to the economy.

What money does government use then? The money they receive as taxes.

If the economy is growing real good, goverment coffers are filling up, government does not need to borrow money from me and you to pay its bills.

Juyst thinking...
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