Comments on: The Fed Decision http://www.economicmanblog.com/sandbox/2015/09/20/the-fed-decision/ Economics, Policy, Finance and General Culture Fri, 22 Mar 2019 01:56:16 +0000 hourly 1 https://wordpress.org/?v=4.7.13 By: Bernard Lahey http://www.economicmanblog.com/sandbox/2015/09/20/the-fed-decision/#comment-8947 Tue, 22 Sep 2015 17:29:19 +0000 http://www.economicmanblog.com/sandbox/?p=728#comment-8947 Excellent article, but why the gratuitous slam on Québec? We speak french, albeit with our own accent and expressions. Not sure you are aware but English spoken in Texas is a bit different than what is spoken in Scotland. But almost all Quebecers also speak English, as well as other languages. We think that is a good thing.

]]> By: Mark B. Spiegel http://www.economicmanblog.com/sandbox/2015/09/20/the-fed-decision/#comment-8913 Sun, 20 Sep 2015 22:22:02 +0000 http://www.economicmanblog.com/sandbox/?p=728#comment-8913 This is EXCELLENT, and I’ll go one step further and explain HOW we know that the Fed is blowing bubbles all over the place:

Real short term rates have been set at NEGATIVE 150-180bp for years now, which means the Fed is PAYING people to take money. Within the definition of “observed human nature” is the fact that any time you pay people to use a valuable resource it gets squandered in really stupid ways (if water meters ran in reverse, every lawn would look like the 18th green at the Masters), and that’s exactly what’s happening now. Money should ALWAYS cost SOMETHING, and thus short-term rates should always be set at least at the core inflation rate +25bp. As the author points out, if a project doesn’t “pencil in” with real short-term rates @ 25bp, it’s obvious that it shouldn’t be done at all!

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