I saw a newspaper headline this afternoon that said something to the effect of: Fed lowering interest rates to combat inflation. I didn't get a chance to read it but I was thinking about it and thought that it sounded funny. When the Fed lowers interest rates, isn't that inflation? It seems that lower interest rates give incentive to banks to borrow more money and in turn, the banks loan out more money, putting more money into the economy, thus inflating the money supply. Am I missing something here?
When the fed "lowers" interest rates, it is buying goverment bonds from private banks which increases money by, the bond amount * reserve requirement . So I have no idea how this would combat inflation...
That's hilarious! I don't know how they could possibly think that; are you sure it wasn't a slip of the tongue?
Don't allow leftists to play games with definitions! Some of the libertarian-leaning leftists at this forum will try to redefine "left-wing" back to its original defition (Third Estate, limited government, free-markets, laissez-faire reforms, etc.). Fine! We non-leftists can't stop them from using their own personal definitions; they can use whatever labels they want to describe any concept they want.However, they have the audacity to then use their personal definition of "left-wing" (remember, the original definition, which is no longer valid) to prove that modern leftists are more libertarian than modern rightists! They will say that libertarianism is "inherently leftist" (again, using the original, no longer valid definition), and use that to insist that we should prefer and side with modern leftists over modern rightists.
Question their motives.
The Fed pumps money into the economy when it lowers the interest rate, thereby raising the inflation rate.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
The only way to keep interest rates lower than their market rate is through inflation.
The fallacies of intellectual communism, a compilation - On the nature of power