[DcifrThs]

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I see. I admit that the ACists around here have greatly affected my understanding of economics. Good to get what seems like educated input, though I must say I don't quite understand. When the interest rate goes down that means borrowing money is cheaper. Shouldn't that increase the demand for borrowing? And doesn't that mean more money will be printed?

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where is this money printing thing coming from? i don't think you really understand what goes on in the economy. the treasury doesn't go around printing money left and right. nor does the fed physically print any money.

the fed HAS all the money it will ever need for the open market operations. and i don't mean this figuritively. i mean the fed LITERALLY has football field sized vaults located around the country with trillions of dollars in US currency to purchase govt. bonds on the open market for policy purposes when necessary. through banking mechanism, that initial injection of money (through the purchasing of government securities from member banks) works through the system via loans above deposits in banks. THAT is the mechanism that increases the overall amount of money in the system (what i think ACissts et. al. are talking about when they say that money is "being printed"...i.e. money is being created from "nothing" in order to lower borrowing costs and icnrease borrowing overall to help bump up consumption).

one thing that Acists et al. might also be referring to is seignorage, though that is a bit of a literal stretch.

i hope that ramble helps. (i seem to ramble alot)... or if not, just ask another question of the clarifying variety.

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The article was in Norwegian, so linking it will probably not do much good. It was an article in a mainstream newspaper made to warn poeple from taking up mortgages in yen.

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ok i think i see what is going on now.

taking out a mortgage (in norway) in yen basically means that you make monthly payments in yen (i.e. buying yen with kroners) back to the bank in exchange for the initial large payment from the bank to you. if the yen depreciates vs. the kroner, then the monthly payments decrease. but if it appreciates, then the monthly payments increase.

the kroner has done well vs. the yen so that may have increased demand for these types of loans.

overall though that kind fo thing is risky and not advisable.

Barron