Game Over – the lunatics are running the asylum
Posted by Ivo Cerckel on December 4th, 2008
The Times carries two contradictory articles this morning.
One by Anatole Kaletsky in which it is being argued that dramatic interest rates can shift the economic paralysis. (1)
And one by David Wighton in which it is being argued that cutting interest rates is not going to increase the quantity of credit available because the mechanism that turns the cuts is broken. (2)
If as Wighton argues, the mechanism is broken, how can Kaletsky then argue that dramatic interest rates can repair the mechanism? (2)
The root cause of the economic downturn is the credit crunch, writes Wighton.
Why does Wighton not elaborate on the causes of the credit crunch?
Is the credit crunch an Act of God?
Or was the credit caused by worthless digital liquidity and fraudulent fractional-reserve banking?
No for Wighton, it is not necessary to inquire into the causes of the credit crunch.
Both worthless digital liquidity and fraudulent fractional-reserve banking deny reality.
Does Anatole Kaletsky really think that dramatic interest-rate cuts will bring the financial system back in line with reality?
Ivo Cerckel
Siquijor, 04 December 2008
NOTES
(1)
Irresistible financial force will prevail
Anatole Kaletsky
http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article5282306.ece
Economic paralysis seems like an immovable object. But dramatic interest rate cuts can shift it
(2)
Rate cuts won’t fix broken mechanism
David Wighton, Business Editor’s commentary
http://business.timesonline.co.uk/tol/business/columnists/article5282819.ece
Cutting interest rates is not going to increase quantity of credit available – the mechanism that turns the cuts is broken
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