On Jul 6, 2008, at 11:00 AM, Marvin Gandall wrote:
> But how would raising interest rates - which the BIS, worrying more
> about inflation rather than deflation, appears to emphasize - not
> affect the working class as well as shaking out the weaker banks
> and corps?
It would, but they're also talking about the long-term importance of stopping asset bubbles. The very idea of central banks targeting asset prices is pretty heretical. Most of Wall Street hates the idea, since they make a lot of money on them, and then stick the public sector with the task (and expense) of cleaning up the mess. Sure, such a policy might keep the unemployment rate higher than it would otherwise be. But it would also deprive the FIRE sector of a good bit of revenue.
Doug