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Man’s a loon

Third, there is no way that the fragile economies in which we now live can sustain positive real interest rates and grow, whatever money market makers might like to think. Positive real interest rates will simultaneously cut consumption, government spending and investment, which are three of the four components of GDP growth (the other being net exports).

So where does the interest paid go? Does it disappear from the ecconomy forever? Or does it go into someone’s wallet. Where it can be used for one two things and must be used for one of those two things. Either investment or consumption.

Interest shifts who has the money, sure. But it doesn’t make it disappear.

6 thoughts on “Man’s a loon”

  1. No. Not investment, Tim. For investment, you either have to buy someone else’s investment. In which case the seller gets the money. Or direct fresh investment. Which consumes goods & services & the providers get the money. When it comes down to it, in the now moment, there are only goods & services. Nothing else. Tomorrow money is tomorrow’s goods & services.

  2. Does he explain how positive real interest rates have any effect on government spending? Where does he see signs of government spending slowing down, let alone reducing?

  3. Life’s too short to read such a moron any longer so am officially abandoning attempts to try on health reasons! Good luck to those continuing to follow him but as the late Sam Goldwyn said: ‘You can include me out’

  4. VP – please stay! Your incisive comments are just so many barbs in the flesh of the moron – I know it’s wrong to delight in highlighting his stupidity (which is every utterance from the cretin), but it provides endless amusement for others.
    Ans I still have a few ‘friends’ who think he knows stuff – weird and idiotic they are

  5. Ed P

    Hopefully my absence will be temporary – it is linked to some personal issues so hopefully will be back online shortly

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