Raising Interest Rates Is Like Starting a Fission Chain Reaction
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RR Phantom
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
Subject: Raising Interest Rates Is Like Starting a Fission Chain Reaction Thu Feb 22, 2018 6:44 pm
Central bankers seem to think that adjusting interest rates is a nice little tool that they can easily handle. The problem is that higher interest rates affect the economy in many ways simultaneously. The lessons that seem to have been learned from past rate hikes may not be applicable today.
Furthermore, there can be quite a long time lag involved. Thus, by the time a central banker starts seeing an effect, it may be clear that the amount of the interest rate change is far too large.
A recent Zerohedge article seems to suggest that problems can arise with 10-year Treasury interest rates of less of than 3%. We may be facing a period of declining acceptable interest rates.
Let’s look at a few of the issues involved:
[1] The standard reason for raising interest rates seems to be concern about inflationary impacts occurring as a result of rising food and energy prices. In practice, the impact of such an interest rate change can be quite severe and quite delayed.
Figure 2 is an illustration from the Bureau of Labor Statistics website showing one of today’s concerns: rising energy costs. Food prices are not yet rising. Normally, however, if oil prices rise, the cost of producing food will also rise. This happens because modern agricultural methods and transportation to markets both require the use of petroleum products.
https://ourfiniteworld.com/2018/02/21/raising-interest-rates-is-like-starting-a-fission-chain-reaction/ _________________ Anarcho Capitalists Retail , OZschwitz Downunder BoutiqueAnarcho-Capitalists,AnCaps Forum,Anti-State,Anti-Statist,Inalienable Rights Defenders,Non-Aggression Principle,Non-Initiation of Force Principle,Rothbardians,Anarchist,Capitalist,objectivism,Ayn Rand,Anarcho-Capitalism,Anarcho-Capitalist,politics,libertarianism,Ancap Forum,Anarchist Forum,Vulgar Libertarians,Hippies of The Right,Forum for Anarcho-Capitalist,Forum for Anarcho-Capitalists,Forum for AnCap,Forum for AnCaps,Libertarian,Anarcho-Objectivist,Freedom, Laissez Faire, Free Trade, Black Market, Randroid, Randroids, Rothbardian, AynArchist, Anarcho-Capitalist Forum, Anarchism, Anarchy, Free Market Anarchism, Free Market Anarchy, Market Anarchy
Subject: Re: Raising Interest Rates Is Like Starting a Fission Chain Reaction Fri Feb 23, 2018 6:37 pm
Pic:
Quote :
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That's SI flooding!
_________________ Anarcho-Capitalist, AnCaps Forum, Ancapolis,OZschwitz Contraband “The state calls its own violence law, but that of the individual, crime.”-- Max Stirner "Remember: Evil exists because good men don't kill the government officials committing it." -- Kurt Hofmann
RR Phantom
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
Subject: Re: Raising Interest Rates Is Like Starting a Fission Chain Reaction Fri Feb 23, 2018 6:40 pm
_________________ Anarcho Capitalists Retail , OZschwitz Downunder BoutiqueAnarcho-Capitalists,AnCaps Forum,Anti-State,Anti-Statist,Inalienable Rights Defenders,Non-Aggression Principle,Non-Initiation of Force Principle,Rothbardians,Anarchist,Capitalist,objectivism,Ayn Rand,Anarcho-Capitalism,Anarcho-Capitalist,politics,libertarianism,Ancap Forum,Anarchist Forum,Vulgar Libertarians,Hippies of The Right,Forum for Anarcho-Capitalist,Forum for Anarcho-Capitalists,Forum for AnCap,Forum for AnCaps,Libertarian,Anarcho-Objectivist,Freedom, Laissez Faire, Free Trade, Black Market, Randroid, Randroids, Rothbardian, AynArchist, Anarcho-Capitalist Forum, Anarchism, Anarchy, Free Market Anarchism, Free Market Anarchy, Market Anarchy
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Subject: Re: Raising Interest Rates Is Like Starting a Fission Chain Reaction
Raising Interest Rates Is Like Starting a Fission Chain Reaction
Subject: Raising Interest Rates Is Like Starting a Fission Chain Reaction 
Thu Feb 22, 2018 6:44 pm
