Friday, December 27, 2013

No Capital Investments?

The Economist wrote an article “More bricks, fewer bubbles” early December that said that no one is quite sure why monetary loosening (QE) has so little effect on investment.  The answer is simple: capital investment is partially for replacement and partially for growth. As long as industrial production is lower than the 2008 peak in industrial capacity, there is no need for investment in growth.
The considerations behind this are described in the Flostock Laws of Demand, which can be found on 

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