2008年11月7日 星期五

Obama won election + England cuts rate 1.5%



Obama and changes
Obama had ran a inspiring campaign and touched some of the fundamental problems of free market capitalism. Many of his ideas I happen to agree. He talked about an economy will fail if it fails to benefits the working class. Free market capitalism has a big defect of creating wealth inequality. The rich class tax on the poor through interest rate. Let's hope he will stick to his words and address these problem when he become president in January.

Bank of England had slashed rate 1.5% yesterday
Are they mad? Is there any credibility left in these corrupted central banks? This is a perfect example of the corruption in the system. Central banks have collectively become a hedge for corporations. Corporations are using central banks to push up there stock prices when the economy is going down.

Credit crisis and Rate Cuts
What central banks have been refusing to acknowledge is that it is the artificial rate cuts are worsening the credit crisis. All hail BoE bold rate cut, we are going to see a massive credit crunch in England in coming months. They are going to pay for their ignorance. Supply and demand teaches us if there is a price ceiling lower that the free market price , there is going to be a shortage. That is, lowering target interest rate is acting as a price ceiling for money, and the artificial rate is massively under the real rate in a free market, therefore we have a shortage (excess demand) in money. Simple.

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