tag:blogger.com,1999:blog-8897997766931633186.post391043067989434145..comments2024-02-14T03:21:37.506-05:00Comments on Monetary Freedom: Speculative Bubbles and the Natural Interest RateBill Woolseyhttp://www.blogger.com/profile/06330232724290161369noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8897997766931633186.post-39210147032398801172017-01-17T10:41:52.483-05:002017-01-17T10:41:52.483-05:00We should be increase with the expectations, as so...We should be increase with the expectations, as sometimes, if we expect too much then we can get into issues. So, we need to be very careful with how we go about handling things, as only then we will be able to achieve greater results. I do it all nicely with OctaFX broker having wide range of facilities from minor spreads to massive deposit bonus up to 50% and is use able too, so that helps me big time in every way.Malhotranoreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-62061525211135731282010-05-01T02:29:25.740-04:002010-05-01T02:29:25.740-04:00The "classic" scenario is where the dema...<i>The "classic" scenario is where the demand to hold money is assumed given as well . . .</i><br /><br />According to Milton Friedman, changes in demand to hold money are usually gradual, except when they are in reaction to changes in the quantity of money.<br /><br /><i>Suppose instead that investment demand increases because of a speculative bubble in housing. The "cause" is the projection of past price increases into the future.</i><br /><br />Are there any historical examples of asset bubbles not coinciding with 'easy credit' - expansion of the quantity of money via the financial system driving the market interest rate below the natural rate?<br /><br /><i>People invest in order to profit from those expected price increases.</i><br /><br />For the speculation to be attractive, the expectation must be not only of price increases, but increases great enough to be competitive with other investments. Easy credit promotes that situation from both directions, driving asset prices up and interest rates down.<br /><br />Granted that an asset bubble in the absence of easy credit can be imagined and described theoretically, I am skeptical that such a thing has happened, or can happen, in the real world.David Tomlinnoreply@blogger.com