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

To: Elroy Jetson who wrote (88732)	9/11/2007 12:56:18 AM
From: ahhaha	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. For a monetarist who decries monetarism you sound like a hypocrite. Increasing the money supply artificially lowers interest rates. There are times when increasing the money supply causes interest rates to rise, and there are times when increasing the money supply causes them to fall. After all, genius, shouldn't an increased supply cause the price of money to fall? 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. Please define "artificial". Can't be done. Oh, it must mean different from what it should be... You also claim you got this answer right when you answered the Mises Austrian quiz, yet your memory is already addled. You're the monetarist and you think monetarism is all wet. Go ahead, deny your monetarism. Then, why do you advocate coin biting? 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. FED reduced rates to below cost for 3 years and during that period money supply rose slowly. Where was the "boom in consumer and investor spending"? Investor spending? What are you talking about, amateur? Go back home and let daddy count some mortgage money for you, sonny boy. With businesses thinking longer term, and consumer thinking shorter term, a discoordination emerges in the economy. What is this drivel? discoordination? What is "consumer thinking shorter term"? Consumers have no time horizon for purchases since purchases are derived and contingent, not, for the most part, discretionary. Please tell me what consumer accumulates a pile of money and then carefully plans purchases. The time relationship between saving and investment, production and consumption, is disrupted. What have we here? A '50s style demand management type argument which always leads to a need for Keynesianism and your favorite theory, monetarism. Market processes reveal that many investments are not really profitable but instead are clusters of errors. What "market processes"? The ones that enable you to decide whether interest rates are correct? Businesses then liquidate these investments, causing a recession. I get it. Market processes refer to the interest rate, the one you know is wrong or right, and consumers thinking short, investing in rising prices, cause rates to rise and business to become unprofitable. So business dumps investments which ruins equity of households and that kills consumer spending. Thus the market causes recessions. Austrian answer. AG's answer.