> On Monday, August 1, 2011 at 09:02:23 (-0700) Jim Devine writes: >> Bill Lear wrote: >>> My brother has advanced the novel idea that borrowing at negative >>> real >>> interest rates is what brought on the inflation of the 1970s.
A "novel" idea indeed. The opposite was the case. The Fed never lent at negative interest rates (until a few recent, passing, episodes) and it certainly didn't do so in the 1970's. It was inflation that brought about negative (expected) real interest rates and thus multiplied borrowing--as has been the case in every cumulative inflationary process throughout history. Shane Mage "scientific discovery is basically recognition of obvious realities that self-interest or ideology have kept everybody from paying attention to" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
