Does the Fed’s Lowering the Interest Rates Strengthen Economic Growth? \ stacker news ~econ

Without the expansion and the enhancement of the production structure, it is difficult to impossible to increase the supply of goods and services. The expansion and the enhancement of the infrastructure hinges on the expansion of saving (i.e., restriction of present consumption).

Savings are required in order to support individuals that are employed in the various stages of production. This includes individuals that are employed in the production of consumer goods. This also includes individuals that are employed in the enhancement and the expansion of the infrastructure. One cannot expand production and the productive structure without prior saving to provide for necessary consumption during the process. Hence, what matters for economic growth is not just tools, machinery, and labor, but also an adequate amount of saving to facilitate the expansion of capital goods.

So what is the purpose of clanging interest rates? Perhaps to change the perceptions of the entrepreneurs and investors into making different moves than they would have made under other conditions. The result is not good in the end because of Malinvestment that are made under the regime of the altered interest rates. BTW, the natural interest rate is the time preference of all the consumers and investors. Not what the FED says it is.

30 sats \ 1 reply \ @Undisciplined 4 Nov

The purpose is to keep the massive transfer of wealth from normal people to the ruling class going.

9 sats \ 0 replies \ @Rothbardian_fanatic OP 4 Nov

Of course, this is all Wall Street and banksters owning the Federal Reserve Bank. However, there is also huge effects in the general economy with all the misperception of returns due to interest rates being artificially and arbitrarily set. The natural interest rate is the summation of all the consumers, investors and entrepreneurs time preference rate, whether high or low. Everything else is just bogus.