I commented last week on a blog post by leftist Aussie economist John Quiggin , who blamed the financial collapse on investment banks, and suggested that either: (i) investment banking should be much more heavily regulated ("Properly done, regulation of this kind would kill off investment banking...
In my previous post I spoke about the role of interest rates in balancing the supply of real savings (from depositors) and demand for those savings on the part of borrowers (investors): What's difficult to grasp here is that savings are not just abstract dollar notes. When I save, I am implicitly...