Speculation can be controlled by rules

A bubble is inflating on the international financial markets because the central banks are making a mistake, the left-liberal Frankfurter Rundschau newspaper warns: "When a central bank raises interest rates because of bubbles on the financial markets, at the same time smothering economic growth and worsening unemployment, something is wrong. And any first-year economics student can look up what that is: you should never pursue two goals with one and the same instrument! … A central bank can … steer the real economy with the interest rate, but it can't prevent bubbles on the financial markets at the same time. … As long as the West refuses to admit that the basic problem with the current brand of capitalism is the free capital markets, the G20 won't be able to create a new global financial order. … Uncontrolled speculation is not a problem of greed, morals or decency but a matter of [setting] rules."

» full article (external link, German)
More from the press review on the subject » Fiscal Policy, » Germany
All available articles from » Robert von Heusinger

» To the complete press review of Monday, November 23, 2009