Submitted by Frank Shostak via The Mises Institute,
According to the Austrian business cycle theory (ABCT) the artificial lowering of interest rates by the central bank leads to a misallocation of resources because businesses undertake various capital projects that — prior to the lowering of interest rates —weren’t considered as viable. This misallocation of resources is commonly described as an economic boom.
We have been through decades of "privatization" -- turning public services over to private enterprise. They lay off the well-paid, unionized public employees and hire people at minimum wage. This cuts the tax base, hits local businesses, and forces foreclosures. On top of that, minimum-age employees require public services like food stamps just to get by.
Submitted by Lance Roberts via RealInvestmentAdvice.com,
In the summer of 1885 William R. Travers, prominent NYC businessman and builder of Saratoga Race Track, was vacationing in Newport, Rhode Island. He pointed out a long line of beautiful yachts tied up in the harbor. When he was informed that they all belonged to Wall Street brokers he simply asked,
“Where are their clients’ yachts?”.
Artist's impression of Fed credibility...
Since The Fed unleashed its rate-hike, things for the confidence-inspiring awesomeness have not gone well...
In September, interbank credit markets flashed a quick and brief warning that something was up... and Janet folded. Three months later and following The Fed's oddly-timed rate-hike, interbank counterparty risk - as proxied by the TED-Spread - has spiked over 45% in 2 days, the most since Sept 2008 (Lehman).