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The premise that government should dictate the interest rates and not let the market determine rates through price discovery is absurd. 100 of Phd's couldn't pr

The premise that government should dictate the interest rates and not let the market determine rates through price discovery is absurd. 100 of Phd's couldn't predict the housing bubble and the financial crisis of 08 and if you think we are safe from that again, good luck. http://amzn.to/2mGM5hA http://amzn.to/2mGM5hA

goldenkey 10y ago
Please dont post affiliate links on HN, especially shortlinks intended to hide the actual tagged URL. You won't go far here doing so. Untracked URL: https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/091298645X/ https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserv...
chad_strategic 10y ago
I'm starting to take great pride in getting downvoted here at "hack" news. There seems be a group think here on this site, in addition to people just commenting on things they have no knowledge about especially when it comes to economics. I guess I'm just blessed with not running with herd. The affiliated link, that was my bad. But money is fiat...
- generj 10y ago
  There's also a lot of people who think they have a little bit of knowledge when it comes to economics. That's usually much more dangerous than knowing nothing at all about the subject. Markets do set interest rates on assets. The interest rate is just the rate of loans the Fed offers to banks. The markets have decided to use this rate as the basis for the loans they offer without coercion from the Fed or the government.
generj 10y ago
The markets do set interest rates on assets. The discount rate is just the rate of loans the Fed offers. The markets have decided to base their rates on the discount rate. Voila, the markets are at work! I suppose letting the architects of the housing bubble (who also didn't predict it) set the discount rate is preferable? Not having the ability to adjust the central interest rate has resulted in recessions in the past. It means every recession could be a depression. Interest rates would increase dramatically right as we desperately need them to lower to prevent the economy from going into a tail spin. Economics is so much more than simply worshiping the invisible hand - if it was nobody would need to get a degree in it. We also need to understand when and how market failures occur.

goldenkey 10y ago

Please dont post affiliate links on HN, especially shortlinks intended to hide the actual tagged URL. You won't go far here doing so. Untracked URL: https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/091298645X/ https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserv...

chad_strategic 10y ago

I'm starting to take great pride in getting downvoted here at "hack" news. There seems be a group think here on this site, in addition to people just commenting on things they have no knowledge about especially when it comes to economics. I guess I'm just blessed with not running with herd. The affiliated link, that was my bad. But money is fiat...

generj 10y ago
There's also a lot of people who think they have a little bit of knowledge when it comes to economics. That's usually much more dangerous than knowing nothing at all about the subject. Markets do set interest rates on assets. The interest rate is just the rate of loans the Fed offers to banks. The markets have decided to use this rate as the basis for the loans they offer without coercion from the Fed or the government.

generj 10y ago

The markets do set interest rates on assets. The discount rate is just the rate of loans the Fed offers. The markets have decided to base their rates on the discount rate. Voila, the markets are at work! I suppose letting the architects of the housing bubble (who also didn't predict it) set the discount rate is preferable? Not having the ability to adjust the central interest rate has resulted in recessions in the past. It means every recession could be a depression. Interest rates would increase dramatically right as we desperately need them to lower to prevent the economy from going into a tail spin. Economics is so much more than simply worshiping the invisible hand - if it was nobody would need to get a degree in it. We also need to understand when and how market failures occur.