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Here is why you are worse economically.

March 1, 2012

In classical economics (CE) good paying jobs are created by central banks CB) pushing liquidity. Liquidity floods the market with cheap money that pays your salary until the next economic disaster. That is what the European Central Bank (UCB) is doing right now, feeding all the other institutions with low-interest loans and the banks in return charge customers high interest for borrowing. The banks make billions. Loans become available, businesses thrive and you get a job. Sure, what the UCB is doing is creating a disguised bailout system to bypass public anger at bailout of failing institutions, but who would object? The public or even classic economists are not well-trained enough to object – in fact they love liquidity.

…. and behavioral economists (BE), they are not well-trained yet to recognize that allocation of funds is 1000% more important to the economy than liquidity.

I am not a classical economist by training, thank God, and I don’t blame these PhD’s for the recessions they caused and will cause again. I don’t even blame Harvard U. or the University  or Chicago where Friedman, Bernanke or Greenspan were trained in “false economics.” I can’t blame people for their “training,” but it is time to see the light and change. Listen, you can start to change in your own economic life: Remember,  “Correct allocation of funds is 1000% more important to your finances than liquidity,  to have money available to buy or sell things!

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One Comment leave one →
  1. March 7, 2012 4:20 am

    Thanks for the good writeup. It in reality used to be a entertainment account it. Look complicated to far introduced agreeable from you! However, how could we communicate?

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