Saturday, September 15, 2012

Economics 00000001

15 September 2012

I commented on September 13, 2012 that I didn't have much more to say about gold investing. However, people do sometimes approach me and tell me that they don't understand economics.

Actually, there is nothing easier than economics.

Here is is.

1. If you save money, you will do well.

2. If you borrow money, you will do poorly.

3. High interest rates encourage people to save money.

4. Low interest rates encourage people to borrow money.

The Federal Reserve has just "promised" that (short-term) interest rates will remain very low (near zero) until at least mid-2015. They are also printing $40 billion new dollars every month to make it easier for people to borrow money.

How do you think we will do?

Here ends the lesson.

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