Comments on: Professor Campbell Harvey responds to student inquiries about the current global financial crisis http://dukeresearchadvantage.com/laura/2008/09/19/professor-campbell-harvey-responds-to-student-inquiries-about-the-current-global-financial-crisis/ Research that Matters Thu, 27 May 2010 07:41:08 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Jay Sweda http://dukeresearchadvantage.com/laura/2008/09/19/professor-campbell-harvey-responds-to-student-inquiries-about-the-current-global-financial-crisis/comment-page-1/#comment-185 Jay Sweda Fri, 23 Jan 2009 14:53:46 +0000 http://dukeresearchadvantage.com/?p=4#comment-185 Geitner was commenting on China. The opinion is my own.<div class="comment-remix-meta"><a href="#" class="quote" onclick="quote('185','Jay Sweda','Geitner was commenting on China. The opinion is my own.'); return false;">Quote</a></div> Geitner was commenting on China. The opinion is my own.
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]]> By: Jay Sweda http://dukeresearchadvantage.com/laura/2008/09/19/professor-campbell-harvey-responds-to-student-inquiries-about-the-current-global-financial-crisis/comment-page-1/#comment-184 Jay Sweda Fri, 23 Jan 2009 14:52:12 +0000 http://dukeresearchadvantage.com/?p=4#comment-184 Finally, some satisfaction. Geithner on China. In my opinon, the role of China's artificial exchange rate, which is set by a centrally controlled, command economy and is first and foremost concerned with growth and population stability. As the market was not allowed to set the proper rate at which capital flows between countries, was not the Chinese interest rate therefore kept even lower than that of the U.S.? This artificial exchange rate mechanism created massive excess pools of capital on a worldwide basis, which enabled the credit binge not just in the U.S. (as always, the U.S. mindset is self absorbed), but in Ireland, Spain and the rest of the developed world. The purchase of agency debt and U.S. Treasuries with these excess pools of capital enabled the 'great moderation' and lulled the world economic mindset into a murked up cheap debt haze. Add to that the propensity to judge one's worth by the level of raw consumption or the size of one's house and the recipe for endless, consequence free consumption was possible. After all, the heroin user doesn't normally make his own heroin.<div class="comment-remix-meta"><a href="#" class="quote" onclick="quote('184','Jay Sweda','Finally, some satisfaction. Geithner on China. In my opinon, the role of China\'s artificial exchange rate, which is set by a centrally controlled, command economy and is first and foremost concerned with growth and population stability. As the market was not allowed to set the proper rate at which capital flows between countries, was not the Chinese interest rate therefore kept even lower than that of the U.S.? \r\n\r\nThis artificial exchange rate mechanism created massive excess pools of capital on a worldwide basis, which enabled the credit binge not just in the U.S. (as always, the U.S. mindset is self absorbed), but in Ireland, Spain and the rest of the developed world. The purchase of agency debt and U.S. Treasuries with these excess pools of capital enabled the \'great moderation\' and lulled the world economic mindset into a murked up cheap debt haze. Add to that the propensity to judge one\'s worth by the level of raw consumption or the size of one\'s house and the recipe for endless, consequence free consumption was possible. After all, the heroin user doesn\'t normally make his own heroin.'); return false;">Quote</a></div> Finally, some satisfaction. Geithner on China. In my opinon, the role of China’s artificial exchange rate, which is set by a centrally controlled, command economy and is first and foremost concerned with growth and population stability. As the market was not allowed to set the proper rate at which capital flows between countries, was not the Chinese interest rate therefore kept even lower than that of the U.S.?

This artificial exchange rate mechanism created massive excess pools of capital on a worldwide basis, which enabled the credit binge not just in the U.S. (as always, the U.S. mindset is self absorbed), but in Ireland, Spain and the rest of the developed world. The purchase of agency debt and U.S. Treasuries with these excess pools of capital enabled the ‘great moderation’ and lulled the world economic mindset into a murked up cheap debt haze. Add to that the propensity to judge one’s worth by the level of raw consumption or the size of one’s house and the recipe for endless, consequence free consumption was possible. After all, the heroin user doesn’t normally make his own heroin.

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