Taylor Rules~!?

  By Mystic | September 11, 2012 - 11:47 |

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Written by: Mystic on September 11, 2012.
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  • amishlandTodd

    It seems to me that with the rise in capital requirements, even a 25% theoretical requirement, that interest rates should be going up, but they aren’t.  

    • http://overthepeak.com/wordpress/ Mystic

       Interest rates will go up when Bernanke (or his successor) says they should go up~!

      • amishlandTodd

        I agree.  Maybe Ben will let go the reins and let them find their own level.  I was looking at the chart, and thinking about Mario’s bond buying, and it occurred to me that all he is doing is keeping the rates artificially low. 

        Thinking back to Econ 101 in my undergrad, it seems that if the banks were required to actually meet their capital requirements without some central bank giving them the cash, they might just have to raise the interest on deposit accounts.  Raising that, will make it cost more to borrow.  People of course will stop spending on the non essentials, but that in turn should drive prices down…..

        I just can’t wrap my head around what would be so terribly wrong with it…

        • http://overthepeak.com/wordpress/ Mystic

           Debt.
          Debt is written on bits of paper.
          Those written numbers do not shrink in a deflationary environment.
          Who is the debt owed to~!?

          • amishlandTodd

            I understand the issue of debt, but I really don’t know that anyone knows who the debt is owed too.  I still have absolutely no answer for what to do about the debt except that someone has to lose.

            • http://overthepeak.com/wordpress/ Mystic

               ’Someone has to lose’.
              Therein lies the base of the fight.
              The numerical advantage of the debtors, against the minority power of the lenders.
              To make ‘em pay it all back.
              To make ‘em pay it all back, but in less valuable money.
              To let ‘em off a bit………..??
              All these questions; not just about what is now, but as the foundation for what will be.
              Do we want to lend ‘em more down the line etc~?

              So many different views.
              No one has a big picture on it.
              It is just a bunch of kids fighting over a few toys~!