Puffer Fish wrote:Explain how lowering interest rates would not be different from "giving money to the rich" in other countries.
You do realise that to be able to lower interest rates, Argentina's Central Bank would have to buy that debt outright? That IS how a Central Bank lowers interest rates, the main thing that would be going on with that policy.
So the two options (if we're comparing them) come down to either printing money to buy all of the debt, or printing money to pay the interest payments on the debt.
That sentence is very hard for me to understand. Does it mean?
1] Explain how lowering interest rates would be different from "not giving money to the rich" in other countries.
2] Explain how lowering interest rates would not be the same as "not giving money to the rich" in other countries.
3] Explain how lowering interest rates would be the same as "giving money to the rich" in other countries.
AFAIK, these 3 all mean the same as your sentence. I tried to just move the negatives around.
If #3 is what you meant, then AFAIK, buying bonds from the rich to lower interest rates, is not giving money to the rich. So, because it is the opposite of giving, I can't explain why they are the same.
. . How is it "not giving money to the rich"? Answer, the rich already own the bonds, so they already have the money that the bond gives them. Buying the bonds just changes 1 form of money into another form of money. Lowering interest rates on new bonds does give less interest going forward to the rich who are the only ones who can buy the bonds.
. . Since you did view the video, you don't understand that Argentina feels it must obey the IMF when it says "raise interest rates to 97%".
And, I say again, I'm not expert enough to understand the situation on Argentina.
However, every advanced nation is not like Argentina; or if the nation is in the EU or EZ then it could and should leave the EU to get out from under being RULED by rules that make no sense when all currencies are fiat currencies. A new EU can be formed without these rules or an EU which is like the US and does tax and spend massively in poor nations or nations that must import so they have cash to pay for the imports (which is what the US does for poor red states). If Germany doesn't want to join, that is fine. It can go on alone.
An example of how dysfunctional the EU rules are is this one.
The US has to add to the deficit more now because of weather and fire damage caused by the changing climate. The EU rules don't allow nations to deficit spend when their debt/GDP is over 60% (most of the nations are already over 60%), and they don't allow the EU to spend in emergencies caused by ACC. Yes, that rule is currently suspended, but they say they will reimpose it very soon.
. . So, as ACC gets worse, this is going to become a huge problem, if it isn't already.