Essential Economics for Politicians

The ultimate proof of the fallacy of mathematical projections comes from the Communist countries. No governmental system in the world has attempted to control all the financial aspects of an economy like the Communists. Yet every government that has pursued the “controlled economy” approach has either collapsed (Soviet Union), changed to limited capitalism (China), or become destitute (Cuba). According to the mathematical models the party leaders constructed, prosperity was supposed to be guaranteed. But it didn’t happen, because mathematical projections can’t account for outside variables. (By the way, considering the above examples, does anyone really believe the United States can have a balanced budget, when that conclusion is based on projected revenues and expenses?)
 
Interest rates are prices. They impart information. They tell a business person whether or not to undertake a certain capital investment. They measure financial risk. They translate the value of future cash flows into present-day dollars. Manipulate those prices — as central banks the world over compulsively do — and you distort information, therefore perception and judgment.

Interest rates ought to be discovered in the market, not administered from on high. They can’t do their essential work if someone, say a central bank, is muscling them around. Let’s get the central banks out of the business of using interest rates — and stock prices and exchange rates, too – as instruments of national policy. Today, investors live in a hall of mirrors: They don’t know which values are real and which are distorted by monetary manipulation. Market-determined rates will help restore clarity.--http://www.nationalreview.com/article/441128/james-grant-monetary-manipulation-must-end
 
Hmmm, seems CoreCivics may be a hot investment. Business may double. With all the potential detentions and arrests private prisons stock will be looking up! You’re welcome.
 
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