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Nader vs Yellen - And the Winner Is . . . [Copy link] 中文

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Post time 2015-11-24 09:49:55 |Display all floors
This post was edited by abramicus at 2015-11-24 09:50

The bankers!

True, low interest rates hurt the savers, and it reduces the interest income of the bankers, but the stock market prospers, and the investment bankers profit handsomely from IPO's and mergers galore.

True, high interest rates increase the interest income of savers, but it lowers their chances of being gainfully employed, as their bosses are more likelily to downsize due to lower demand by consumers and higher costs of borrowed capital.  Bankers, however, stand to gain higher interest income, even as their investment banking income may decline.

Well, what can we expect from an economic system where win-win is the guaranteed solution to all problems - if you are a banker?

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Post time 2015-11-24 09:54:35 |Display all floors
This post was edited by abramicus at 2015-11-24 09:56

That being said, Yellen is probably right that the Fed has to raise interest rates to save the US economy from excessive inflation, even if, inadvertently, it will cause China's artificially overvalued Yuan to become too expensive to support even with China's, now-reduced but still substantial, forex reserves of 3.2 trillion dollars.  Yellen may yet save China from being strangled to death by its own central bank buying up Yuans with its hard-earned dollars, just for the ego trip of pegging the Yuan to the Dollar and even appreciating it against the greenback for effect.  Ata girl, show them machismos who's the real boss!!!

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Post time 2015-11-25 22:19:13 |Display all floors
WHO IS AFRAID OF COMPETITIVE DEVALUATION, WHEN COMPETITIVE OVERVALUATION IS HERE ALREADY?

China's futile attempt to sell its dollars for its own Yuans has an unintended effect of inducing inflation in the Dollar economy.  This forces the Fed to raise interest rates, which forces China to sell even more dollars at a faster rate to prop up the Yuan, which forces the Fed to raise rates even faster, and so forth.  The end result is a broken Chinese economy, empty Chinese forex reserves, and the US economy facing the same syndrome of declining manufacturing, layoffs, and social unrest, as China is now experiencing in short but sure steps.


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