Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
It is very indirect.  Agreed.  And the government -- by "government," I mean the elected officials -- has no power over the lending rate.  (Its only power over the money supply is through spending.)  The central bank controls the lending rate, obviously.  The objective of the game should be to involve the central bank and government only to the extent that it is necessary.  It's good to try to find ways for the market to move rates as needed.  The problem with gold is that it doesn't move as the item should move for the given purpose.  Gold could be a shooting upwards in value while the economy plunges into recession.  It's better to let the economics and banking gurus determine the supply, even if it is an elitist model.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Mar 1st, 2006 at 09:11:07 AM EST
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