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Can someone correct my article and/or refer me to sources?

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Sukrit posted on Wed, Jan 30 2013 11:04 PM

I wrote this for a recent article:

"In any case, the much vaunted ‘independence’ of the RBA is greatly exaggerated. The three most powerful groups in Australian society are the government, unions and banks, and all three have attempted to influence the Bank in ways that benefit themselves. What all three groups have in common is a desire for low interest rates and an increased flow of credit. Governments have used central banks as their personal printing press to create money to finance wars and Keynesian stimulus packages; banks prefer low rates as it enables them to increase profits and unions like low rates because it temporarily boosts the competitiveness of their own workers by devaluing the dollar."
 

I'm trying to get some sources for the last sentence. Why do unions like low rates? How exactly do low rates increase bank profits?

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Usually, you write articles after you have looked over the sources and know what you are talking about.

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So let me get this straight...you wrote an article, made a bunch of claims, and are now here asking us to support them for you?

 

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Sukrit replied on Wed, Jan 30 2013 11:20 PM

Given the responses, I'm not sure the people around here are the sharpest tools in the shed, it's probably best I do my own digging around the site.

I shouldn't have to break this down but, obviously the article hasn't been published yet. I won't put that para in until I find peer-reviewed sources, there's nothing factually inaccurate I just wanted to go more in depth. I have a few newspaper articles saying the same thing.

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Neodoxy replied on Wed, Jan 30 2013 11:57 PM

"Given the responses, I'm not sure the people around here are the sharpest tools in the shed, it's probably best I do my own digging around the site.

I shouldn't have to break this down but, obviously the article hasn't been published yet."

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the article hasn't been published yet.

That doesn't make a differrence.  The point is that you are making claims without being able to source them.  Reading source material is step one.  How did you get all the way to the editing stage without

you know what

forget it.

Good luck with that shit.

one more thing,

Governments have used central banks as their personal printing press to create money to finance wars and Keynesian stimulus packages; banks prefer low rates as it enables them to increase profits and unions like low rates because it temporarily boosts the competitiveness of their own workers by devaluing the dollar."

It shouldn't be hard to cite that.  It's also terribly worded and horribly polemic.  You need to familiarize yourself with what you want to write about before you write about it.  This is why i have no faith in you people.

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This is why i have no faith in you people.

Racist?

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^

Both comments made me lol.

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Come on guys. Do you think it's good for the cause to flame a guy just for this!!!? The guy is clearly a good guy. He's not a troll; give him the benefit of the doubt.

So, Sukri, scan Rothbard's "What Has Government Done To Our Money" for more detail. But I would say briefly, that the trade unions want monetary inflation because it raises the exchange rate for the local currency - foreigners can buy more of the local currency than before - and so the world-relative prices of local products look lower, and more exports occur, thereby promoting the hiring of union labour for those exported goods. The unions don't want to lower their members' wages to compete globally because it makes unions look, so this is an under-the-table way for them to get their members employeed without wage decreases.

This is a temporary situation however. As the nation's prices adjust up to the new money over time, the union members demand pay increases to combat cost-of-living increases. This makes them less competitive globally. And, they're back at the start calling for more monetary expansion.

I say there's little direct causal correlation between interest rates and bank profit, or at least that it's case-by-case, but I will say long-running low interest rates cause banks to look to more risky ways of making money and are thus more prone to failure and bailout by the state.

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I'm not so convinced unions and banks benefit from artificially low interest rates... really no one should want them because of the damage they wreck on the economy.  i guess politicians seeking re-election would be the main benefactors, or people who can time the boom and bust

 

... just as the State has no money of its own, so it has no power of its own - Albert Jay Nock

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Wheylous replied on Sun, Feb 17 2013 10:51 PM

I'm not so convinced unions and banks benefit from artificially low interest rates

Why do they take the money?

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