evoke said:i do not understand if the fed raises interest rates why does it have a effect on the whole world. i know when america does bad, europe does bad .but the whole world. they must have a huge grasp on the world.
why is that.
inflation seems to be the biggest threat now. in ireland now it is 3.9%. maybe this inflation will cause a market down turn
Actually I think the larger reason is the fact that the wages being demanded (and achieved) in chinese factories are rising dramatically (tho still incredibly low).darex said:Now that the China effect has disappeared due to commodity prices rapidly rising
evoke said:inflation seems to be the biggest threat now. in ireland now it is 3.9%. maybe this inflation will cause a market down turn
PMU said:CGorman: It’s a pity, but you probably failed your Leaving Cert if your essay on inflation reflected what you said in your post. “Inflation is Always and Everywhere a Monetary Phenomenon”. So said economist Milton Friedman and he won a Nobel Prize for that. The ECB says it as well. Once you increase the supply of money faster than the economy can create value you get inflation. It’s nothing to do with cost push, e.g. from energy and services. That just reflects inflation, it doesn’t create it. Inflation is never beyond our control. That’s what monetry policy is about, and you can read up on monetary policy on the ECB’s web site www.ecb.int.
Duplex said:This post will be deleted if not edited immediately give the kid a break he/she's half way through their exams and you have them failing. C.Gorman you made a number of very interesting points, kick ass.
i do not understand if the fed raises interest rates why does it have a effect on the whole world.
PMU said:CGorman: A very insightful post, but you must remember that “Inflation is Always and Everywhere a Monetary Phenomenon”. So said economist Milton Friedman and he won a Nobel Prize for that. The ECB says it as well. Once you increase the supply of money faster than the economy can create value you get inflation. It’s nothing to do with cost push, e.g. from energy and services. That just reflects inflation, it doesn’t create it. Inflation is never beyond our control. That’s what monetry policy is about, and you can read up on monetary policy on the ECB’s web site www.ecb.int.
Remix said:And at the same time hope interest rates don't rise.
Remix said:This is the successful approach that we keep telling the rest of europe to follow but for some reason they don't appear to listen.
What a ridiculous thing to say! Have you never heard of hyperinflation? Anyways inflation is only a theoretical thing - as is the entire subject of economics. You are right in the sense that inflation can be up'd or down'd by monetary policy; but this is at the expense of other economic aims. Did you ever hear of the Phillips Curve?PMU said:Inflation is never beyond our control.
PMU, this is a discussion fourm for debating ideas - you obviously disagree with my opinions; but there is no need to cut me like that. I may not have a degree yet, or a masters in the subject; but I am an entirely self thaught student of economics and it was my best result in the mocks (83%); in addition I do Business and Accounting. I also run a business and have been an avid reader of Fortune, Business Plus and especially The Economist since as young as age eleven. I have read countless books on the subject and related areas rangeing from Wealth of Nations to Freakonomics. Yes I am an amateur and my opinions may not be aligned with yours - but please do not react so poorly. What qualifies you above me to theorise about this subject? Are you an economics teacher, have a degree in it? Or are you just like myself, a person with an interest in the topic.PMU said:but you probably failed your Leaving Cert
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