Quote Originally Posted by motorfirebox View Post
Private investment allowed the housing bubble to expand beyond the simple, minimal losses of bad mortgages into the subprime crisis. Private investment is currently allowing housing prices to bubble again even as median wage nosedives. Private investment is a great engine, but a terrible steering wheel.
Bridge to nowhere



Trabant, http://en.wikipedia.org/wiki/Trabant



Central bank, From Wikipedia, the free encyclopedia, http://en.wikipedia.org/wiki/Central_bank

The primary function of a central bank is to manage the nation's money supply (monetary policy), through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Central banks in most developed nations are institutionally designed to be independent from political interference.
Monetary policy, From Wikipedia, the free encyclopedia, http://en.wikipedia.org/wiki/Monetary_policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.[1][2] The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. It is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values.
Supply and demand, From Wikipedia, the free encyclopedia, http://en.wikipedia.org/wiki/Supply_and_demand

The four basic laws of supply and demand are:[1]
If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price.
If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.
If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.