Home > Miscellaneous Musings, Predictions > What the market does

What the market does

People often have a negative view of the “market”.   But it is just an information gathering exercise.  Should we produce more X?  Well, look at the price.  If the price is high, it means more supply will be encouraged.  If the price is low, people don’t want it.  Stop producing it.

Governments hate prices because they think it’s their job to second-guess where resources should go.  So they meddle.  Endlessly.  And create disasters whenever they meddle.  And NEVER reduce their own number.  They expand like rats or cockroaches, paying themselves and their friends enormous salaries to fiddle endlessly with prices – with prices people determine voluntarily in a free market.

Take housing.  You may think the solution to the housing problem is to subsidize buyers into housing with first home buyers grants.  What happens?  Prices soar out of reach anyway.

OK, let’s put in place limits of rents.  What happens?  Housing shortages, of course.

Now the government is quietly manipulating so many markets all at the same time, the price mechanism no longer works.

Take gold and silver.  Governments hate (HATE) the idea that they are sending the message that fiat money is depreciating and getting worthless.  So they try to hammer the price down.  What happens?  There are gold and silver shortages all around the world.

See here for evidence.

I have an idea for all meddling bureaucrats and central banks.  Resign.  Everyone would be better off.

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