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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (88729)	9/10/2007 6:47:52 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

For a woman who claims to be one of the best economists in America, because of your Art School education, you sound terribly confused. Increasing the money supply artificially lowers interest rates. You claim there is no way of knowing if the resulting interest rate is artificially low. But your refusal to believe this, does not make it any less true. You also claim you got this answer right when you answered the Mises Austrian quiz, yet your memory is already addled. 7. What causes the business cycle? C. Expansion of the money supply artificially reduces interest rates. This causes a boom in consumer and investor spending. With businesses thinking longer term, and consumer thinking shorter term, a discoordination emerges in the economy. The time relationship between saving and investment, production and consumption, is disrupted. Market processes reveal that many investments are not really profitable but instead are clusters of errors. Businesses then liquidate these investments, causing a recession. Austrian answer. mises.org .