ECONOMICS TRUMPS POLITICS

The reason politicians should not meddle with markets is because the market will eventually do what the market wants to do. The market is you and me and all the other market participants. Artificially creating floors and ceilings for prices and wages and creating onerous regulations only artificially changes prices for a short time until the market eventually corrects. 

The most egregious market interference is when one person, like the Chairman of the Federal Reserve, determines what the market should be (instead of all of the market participants). The FED is currently using non-market oriented gimmicks to keep interest rates artificially low and the result is that the low rates are driving investment into projects that would not be profitable if interest rates were higher. But alas, interest rates will go up because the FED will not be able to make its gimmicks work forever. When that happens we will have another market crash. It is as inevitable as the sun rising in the east and setting in the west.

Click the link below to read how Venezuela has resorted to jailing currency traders to try to keep its currency stable (hint: its not working).

http://www.bloomberg.com/news/2014-09-26/venezuela-s-biggest-bill-buys-buck-on-black-market-as-bonds-due.html?cmpid=yhoo