MDA - Market Direction Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis

SPY 659.00

+1.0%

Nov 21 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Ramsey Su who wrote (7651)	3/6/1999 11:22:00 AM
From: Casaubon	Read Replies (1) of 99985

I recently read an interesting article concerning drastic measures to prime sagging economies. It invoked the use of negative interest rates to prime the economic pump (in essence gauaranteeing a positive return on borrowing money). Japan is very close to employing such a technique. Since real interest=interest rate - inflation rate, if the inflation rate is negative (ie deflation) Japan could theoretically lower the interest rate to keep up with deflation. The low interest rates keep the yen week and allow the Japanese to "sell their way out of crisis" by creating very large foreign trade surpluses. This is what is causing the most pressure in the world, and the chinese yuan is getting beat up because of it. Any prolonged exposure to these interest rates and the chinese will be forced to devalue. If the rest of the world devalues at the same rate we inflate, the economy can walk a long way with metastable interests rates. We are propping up other countries economies with our rapid expansion. And their deflation is allowing our expansion to proceed relatively cheaply.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next