Re:Inside the Bitcoin advocates’ closed-door meeting with fe...
by dredmorbius on Wednesday August 28, 2013 @06:18PM
(#6293061)
If real GDP growth stops or even becomes negative
Given that return on invested capital has been decreasing 1965-2009, and I've seen similar charts for GDP, we're on track for that. How our banking/finance system resolves that situation will be ... interesting
I still don't see an argument that the real interest rate is decreased by long-term stable inflation.
I need to think this over a bit more. I'm not sure there is a stable long-term relationship here -- the financial system is part of the internal control and feedback system of the economy, growth is ultimately dependent on exogenous factors (notably resources). So it's fair to say that the real interest rate is determined by the nominal rate and the inflation rate. And the nominal interest rate is strongly influenced by the real rate of return on investment. See Shift Index above.
Though I'm trying to reconcile that with the low interest rates of the late 1960s / early 1970s and high interest of 1979-1982 or so.
Given that return on invested capital has been decreasing 1965-2009, and I've seen similar charts for GDP, we're on track for that. How our banking/finance system resolves that situation will be ... interesting
http://www.deloitte.com/view/en_US/us/Insights/Browse-by-Con...
http://www.forbes.com/sites/stevedenning/2012/01/25/shift-in...
I still don't see an argument that the real interest rate is decreased by long-term stable inflation.
I need to think this over a bit more. I'm not sure there is a stable long-term relationship here -- the financial system is part of the internal control and feedback system of the economy, growth is ultimately dependent on exogenous factors (notably resources). So it's fair to say that the real interest rate is determined by the nominal rate and the inflation rate. And the nominal interest rate is strongly influenced by the real rate of return on investment. See Shift Index above.
Though I'm trying to reconcile that with the low interest rates of the late 1960s / early 1970s and high interest of 1979-1982 or so.