A Quote by Edmund Phelps

To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created.

Edmund Phelps

Quote Topics

Asset Consumer Created Demand Destroy Down Enough Force Government Interest Interest Rate Interest Rates Jobs More Possibly Prices Pump Rates Than Up Would

Quote Author

Edmund Phelps
American - Economist
Born: July 26, 1933

Interest rates are to asset prices what gravity is to the apple. When there are low interest rates, there is a very low gravitational pull on asset prices.

Warren Buffett

The underlying strategy of the Fed is to tell people, "Do you want your money to lose value in the bank, or do you want to put it in the stock market?" They're trying to push money into the stock market, into hedge funds, to temporarily bid up prices. Then, all of a sudden, the Fed can raise interest rates, let the stock market prices collapse and the people will lose even more in the stock market than they would have by the negative interest rates in the bank. So it's a pro-Wall Street financial engineering gimmick.

Michael Hudson

Let's have honest interest rates. Let's let the free market set interest rates in that zone where supply of savings is matched up with demand for real borrowing for capital projects.

David Stockman

The problem is that you're creating a system of bubble finance where interest rates are so low that people can speculate. An asset value goes up. You put it up as collateral. You borrow against it. You buy more of the asset. You then take the rising asset. You borrow against it again. This is the nature of what's going on in the world. This isn't an excess of real savings. This is an excess of artificial credit that's being fueled by all the central banks.

David Stockman

There is no doubt that the Fed's large-scale asset purchases have caused major increases in a number of asset prices in the economy. This is especially true of mortgage backed securities and corporate bonds, and quite possibly of equities as well. For those people and institutions holding those things, the run up in prices has been a wealth bonanza.

Gerald Epstein

It's sort of like a teeter-totter; when interest rates go down, prices go up.

Bill Gross

The greatest economic power might in fact remain in the hands of the Federal Reserve. Economists credit the Fed's policy of keeping interest rates at historic lows with helping to pump up the economy and bring unemployment down.

Andrew Ross Sorkin

In commodities, when prices go up, demand goes down. In stocks, when prices go up, demand goes up.

Rakesh Jhunjhunwala

Exporting oil would not drive up prices at the pump. American drivers buy refined products, which the U.S. already exports. Many studies - from a range of institutions and government agencies, including the Congressional Budget Office and the Energy Information Administration - have shown that lifting the export ban could actually lower gas prices.

Harold Hamm

The worst time was in 1985 when house prices crashed and interest rates went up to 14 percent. I was not winning on the snooker table and I had this big image to keep up - and a lifestyle where I lived beyond my means.

John Virgo

When they say inflation is bad, deflation is good, what they mean is, more money for us 1% is good; we're all for asset price inflation, we're all for housing prices going up, and we're all for our stock and bonds prices going up. We're just against you workers getting more income.

Michael Hudson

To investors, job creation is a second-order effect. Market participants care first about interest rates, exchange rates, bond prices and the one great factor that affects all three: the long-term solvency of a bond company called the U.S. government.

Amity Shlaes

Since when do we let the government decide what is or isn't good for us? What the hell does Congress know about nutrition, anyway?... If the government can use force whenever something is "in our best interest" then government should force everyone to wake up at 6am every morning for calisthenics in the front yard. Fast food establishments should be torn down and replaced with bars that serve carrot juice and alfalfa sprouts, since - "it's in your best interest." This paternalistic attitude that "the government knows best" and that you are merely a helpless child is insulting and reprehensible.

Michael Badnarik

If you let interest rates be freed, be set by the free market, they would rise dramatically. There would be a lot of broken furniture on Wall Street. It needs to be broken. The back of the speculative bubble would be broken and we could slowly heal the financial system. That's what I think we need to do but it's never going to happen because there's trillions of asset values dependent on the Fed continuing to suppress, repress interest rates and shovel $85 billion a month of liquidity into the market.

David Stockman

When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.