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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: frankw1900 who wrote (3246)	10/20/2001 12:54:51 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Some union agreements are clear in this Not necessarily. Some companies pay certain individuals inflated compensation in order to retain them. In other situations individuals are seemingly critical and so can make demands which are observed by other uninformed individuals as undeserved and so give these others the will to hold out for more too. There are many factors which increase the marginal compensation and which drags up the average compensation. I had proposed a thesis that the persistent divergence between these rates of compensation is permitted by FED's interference at the margin in the cost of money. This is the intrinsic source of creeping inflation. It is axiomatic that creeping inflation accelerates. If FED didn't interfere by setting rates and let rates freely float, compensation would converge and the average rate of compensation would fall naturally to the productivity rate. You don't have to calculate anything and you pretty much don't need to worry about the rate at which money is created by the central bank. If the central bank created money at a rate faster or slower than ideal, the free market in money would reflect that and change the effective cost of borrowing. Also, adjustments to errors don't need to be done timely or accurately. The FED gives up all these constructive circumstances just to retain the illusion that they are in control. They fear what they have imagined and bring upon us what they fear by trying to prevent it. This is no different from the clash between monarchy and democracy which so dominated human history. Unfortunately, the professors at universities are intellectual cretins, but mostly have their elitism to protect rather than push to implement democracy in money. Thus, they are no different from the medieval church which maintained the divine right of kings.