Interest rates are also market phenomena. They represent people’s valuation of present versus future dollars, which ultimately depends on people’ subjective values.

There is no way someone can decide, in the abstract, what everyone else’s subjective values are or should be, nor tell everyone how they should value one scarce thing *relative* to all other scarce things. Anyone pretending to decide, in effect, what the structure of interest rates should be is a charlatan, and all Keynesianism and monetarism is charlatanism. It is based on a false pretence of knowledge: economists pretending to know what the capital structure of the entire economy should be. There is no way an economist can know this because
a) of the subjective values and relative valuations involved, and
b) because capital is not just one big monolithic lump or quantity as they treat it to be. Capital includes all the trucks, tyres, sheepyards, working dogs, shearing sheds, ramps, gates, bakers’ ovens, hammers, roads, protective clothing, calculators, shops, factories, offices, tools, and machines whatsoever that people use to produce goods and services ready for consumption. It is complete and utter bullsh/t that academic economists know, or can know, what the supply of productive goods should be relative to the supply of all other productive goods, and consumer goods, now and in the future.

No person, committee, or board *whatsoever* has or can have the ability to know what they would need to know, in order to decide interest rates, without at the same time systematically advantaging one group, and unfairly disadvantaging another group. The problem with the Fed cannot be solved by transferring the decision-making monopoly from a clique of banksters dependent on government privilege, to a claque of bureaucrats dependent on government privilege.

The solution is to abolish any legal monopoly on supplying money, and for there to be free competition in the supply of money. This would prevent the current problem of privatized profits and socialized losses.

Oops Arjay, its all gloom and doom, time to slit your wrists or
jump out of that window :(

Fact is, Greece has been cooking the books for years, now the truth
is coming out. Now you want to blame speculators! Arjay, Greece
cooked the books, not speculators.

We've been through all this Fed stuff before, but it does not sink
in with you. All savings banks in the US, are part owners of the
Fed. But I remind you yet once again, Fed profits are paid to the
US treasury, this year IIRC it was about 50 billion$.

Yes, Bernanke printed some money. Had he let everything collapse,
the alternative would have been a domino effect, a global
depression. You Arjay, might have been out of a job.

Interestingly, most of the money lent to banks has in fact been
repaid, at a good profit for the US taxpayer. Financing the US
deficit is another story. If not enough can be borrowed from
China etc, they will have to print more. The present administration
admit that its unsustainable, but the it was George who crashed
the US economy into the ditch, so short term they need policies to
get it out again.

But anyhow, we would not want these facts to interfere with your
hobby of conspiracy theories, you'd have nothing to do then, to
amuse yourself.

Good stuff yabs.
Over to you Arjay.

On the first day of 2011 or 2100 for that matter and America has not gone bankrupt the arjay syndrome will live on.
Yes America is in a bad way, financially, a self imposed wound.
But broke? never.
Kings in olden days often got into such debt, they cut the heads of those they owed money to.
Capitalism has always used credit ,cash we did not have, to make mass production work.
Look at just one average new home buyer, about to go into debt to purchase.
Home and contents in Sydney surely one million dollars at least.
And even if house hold income is large, say 100.000 a year ten years total income, in reality 20 at least to pay that debt.
It however will be paid, hard times harsh times much pain, but in time most debt gets paid.
Unless you are governing Greece, then you spend and blame Germany for nor giving enough in reparations 60 years ago.
Some like arjay will support that.
not me.

Yabby, Belly
You seem to think governments can inflate indefinitely?

Peter, I think you'll find that the world's central banks decided
that annual inflation of around 3% was quite acceptable and can
be lived with. Its certainly one way in which alot of them, will
pay off their debts.

You could of course lower that, by creating a massive credit
squeeze, so that people would battle to borrow. The result would
be an economy that tanks, lots of unemployment etc.

So yes, we can live with 3% annual inflation.