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What stands out from the graphs is not any strange behaviour by the ECB, but the 5-year dip in US interest rates (including having the "real interest rate" below -1.0% for all of 2003 and 2004.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Thu Dec 1st, 2005 at 07:11:28 AM EST
Greenspan is a God and can do no wrong. And the US economy is growing. And the eurozone is stagnant. and profits are up. etc....

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Dec 1st, 2005 at 07:16:47 AM EST
[ Parent ]
I mean, I didn't realize that Greenspan cut the interest rates by 4.5% over a year. No wonder there was a remortgaging boom!

No wonder it jumstarted the economy and forestalled a recession.

The problem is that, 4 years later, he's increased the interest rates by 2.5% over 18 months. Ouch...


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Thu Dec 1st, 2005 at 07:24:35 AM EST
[ Parent ]
From 2002 through 2004 the Fed set a negative interest rate; in effect the Fed was paying banks and major financial institutions to borrow money.  The resulting flood of cash has fueled the housing boom, home equity based consumption, overseas investments in manufacturing, (for reasons I've -tried to- explain elsewhere) and the hollowing of employment opportunities in the US.
by ATinNM on Thu Dec 1st, 2005 at 11:39:01 AM EST
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