The Errors Behind Today's Economic Woes - WSJ.com
As for barter, there were some interesting comments related to that on Bloomberg Wednesday - to wit, the markets are acting irrationally, currencies the same and no one knows what to do or what play is coming next.
Thus, it would seem as though this is akin to barter - i.e. for example, buy some Swiss Francs so you can hope to barter in your own local currency in the future for the same amount of goods you local currency would buy now. Same with gold.
How the economy will all play out is certainly not known by me. However, as crazy as housing prices going up indefinitely without a commensurate change in income or limit on supply; so to is the idea that governments can print money to make up for deficits.
Somehow the idea that there is a clearing price for savings (foregone gratification) and borrowing (to provide a future stream of income to reward whoever deferred their gratification) seems to escape the daily media and most current politicians.
This dichotomy from basic economics 101 will haunt us - but, like the housing bubble, until it bursts and then maybe a few years after, no one wants to know or think about it.
What was the rate today on Greek 2-year bonds? I think Bloomberg had posted something like 44%!
Can we possibly say "oh my!" and wonder why Obama and the Congress are following a Greek economic policy? Oh well, go to sleep and hope it will all go away with some magic.
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