[quote]Ryan P. McCarter wrote:
[quote]orion wrote:I have never changed my definition.
It is just that when you point at “market failure” I point out that the market for money is nonexistent.
That is not a change of definitions but accepting the reality that interest rates are not the product of market forces but of price fixing.[/quote]
See, there you go. The US has a central bank, therefore, anything bad that happens is the central bank’s fault and has nothing to do with financial markets getting prices wrong. You are constantly making qualifications like this.
In fact, as I pointed out earlier and which you ignored, the Federal Reserve significantly reduced the expansion of the money supply at the same time the bubble was inflating, so that at its peak, it was nearly constant. In addition, you ignore the other effects influencing prices, zeroing in on the convenient (but of course, incorrect) target.[/quote]
It does not matter what the Fed did after the horses were out of the barn.
They blew up the bubble BY TRIPLING THE MONEY SUPPLY.
Whether they made some cosmetic corrections afterwards is next to irrelevant.
They are still proping up the prices real estate, at the cost of prolongoing this mess.
On the other hand, in Europe, where the central bank has a target of 2% inflation per year we do no have a similar problem in the “real” economy like the US does.
Our financial system yes, because those were closely linked to the US system, our “real” economy no, because the misallocation of resources never took place.
I do not misrepresent anything, you try to major in the minors.
Nothing you pointed out matters in the light of a FUCKING TRIPLING OF THE MONEY SUPPLY.
Its like a fart in a storm.