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Low Interest Rates and Jelly Doughnuts

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Low Interest Rates and Jelly Doughnuts

Postby hobbyguy » Nov 14th, 2012, 10:04 am

http://www.economist.com/blogs/buttonwood/2012/11/monetary-policy-1

Interesting to see an opposing voice to Bernanke's low interest rate policy coming from a hedge fund manager, and he is not alone. The jelly doughnut analogy is good, eating one will perk you up with a sugar rush, but eat too many and you become sick. He argues that the low interest rate policy has long past that point.

I agree with him.
We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both. - Louis D. Brandeis
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Re: Low Interest Rates and Jelly Doughnuts

Postby Glacier » Nov 14th, 2012, 5:09 pm

I've been saying this for years now, so ya, I agree too.
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Re: Low Interest Rates and Jelly Doughnuts

Postby Sn0man » Nov 14th, 2012, 6:10 pm

What would happen to the US debt given a rise in interest rates by just 1%? They'd probably go bankrupt overnight.
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Re: Low Interest Rates and Jelly Doughnuts

Postby hobbyguy » Nov 15th, 2012, 11:30 pm

I suspect not much as Bernanke can manipulate the bond rates - just as he has been doing right now.

Perhaps though, it might be a good thing as the prospect of higher rates might put a fire under the politicians to work something out instead of just posturing and finger pointing.
We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both. - Louis D. Brandeis
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