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The Masked Tulip

Lehman 'prophet' Fears Second Crisis If Us Interest Rates Are Kept Low

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8224338/Lehman-prophet-fears-second-crisis-if-US-interest-rates-are-kept-low.html

America is storing up a second financial crisis by keeping interest rates at record low levels, according to David Einhorn, the hedge fund manager who first publicly warned about the financial catastrophe facing Lehman Brothers.

Edited by The Masked Tulip

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the hedge fund manager who first publicly warned about the financial catastrophe facing Lehman Brothers.

Sounds like he has a clue. That'll stop any politicians listening to him, just like Schiff, just like the Madoff whistleblower...

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Does anyone know of an actual example of where low interest rates helped an over-indebted country grow out of debt? Most of the economics profession seems to regard the idea that interest rates need to be kept low as some sort of sacred truth, and I could understand that many economic models would support that idea, but is there an actual historical example of where this worked?

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From what I see low rates prevent growth once asset prices have been blown up.

Why rent a shop for 1000 a month when its worth 300,000 to sell. Why bother getting tenants when your new build apartment is going up by 1000 a month....rent is a inconvenience.

Once everything is blown up you cannot rent a shop or buy a business which has any property component. Any businesses that go under just sit their waiting for the offer thats not going to come.

Why bother saving?

Low rates just make people run for the rentier investments and having assets is better than the money itself "debt is wealth" is a saying I hear on this board a lot sarcastically but in a low rate environment its true.

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Does anyone know of an actual example of where low interest rates helped an over-indebted country grow out of debt? Most of the economics profession seems to regard the idea that interest rates need to be kept low as some sort of sacred truth, and I could understand that many economic models would support that idea, but is there an actual historical example of where this worked?

More to the point does anyone know of any examples where highly paid prats have produced any results apart from in mathematical models where the result is rigged to give the right answer?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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