My answer to Why does increasing money supply result in a short-term decrease in nominal interest rates but a long-…
Answer by Desmond Last:
It in the short-term it increases demand by allowing capital liquidity to be more available through the lending system. Then demand outstrips supply so the money supply has to be used to control free-flow liquidity by increasing interest rates. Do you want inflation or unemployment is the result for the Osborne's of the World.
Of course the cycle is now made longer by almost uncontrollable Government and Private borrowing until capital gets scared and takes flight, then we all suffer.
We need a new system; one which rewards endeavor not greed and still applauds achievement.
We cannot continue to take the value given to the production unit and allow it to be multiplied by speculative credit, and that multiplication to be funded by a system of credit, which attempts to equalize currencies by supporting the financial system and not the productive economy, as the Euro does and the IMF funds.
Your question highlights the two questions for the Economies of the World- when is the money going to run out?
How much is a Government's sovereignty diminished by its borrowings?
Greece is a good example. Who is the Government of Greece – Merkel and the IMF or the Greeks? My advice to Greece is to dump the Euro and to dump the EU. The EU has proven itself incapable of dealing with any of the problems of Europe or the World. It certain only now exists as market and a money pit. It is a con. Take away the EU and the market still exists. Yours is a short question that raises so many others so I will leave it at. http://www.desmondlast.com
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