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May 2, 2005
Trumpspeak Mon., May 2, 2005, 3:39 PM
CNBC's Jane Wells interviewed Donald Trump today, who told us there is no real estate bubble, but "if interest rates go up, there will be a bubble!"
Actually The Donald was trying to say that there really is a bubble, and if interest rates go up the bubble will burst.
Then, in an after-thought he got it right, more or less, when he said: "If interest rates are allowed to go up, there would be a total decimation..." Ouch, isn't that the truth?
But The Donald ought to know that interest rates are not "allowed" to go up or down. Although he might like to see things a little differently, we don't live in a controlled society. We have to deal with a free market system.
Rates will go up when there is more demand for money, and there will be as the Fed tightens more or individuals and corporations have to spend more for the same goods and services they bought the prior year, or they want to save more or invest more in capital expenditures in hopes of higher future returns. Of course, you already know that.
But, I guess The Donald kept it a lot simpler: rising interest rates will lead to "decimation" (his choice of words)... The words of a master communicator.
Posted by Posted by Bill Cara on May 2, 2005 03:38:56 PM | Category: 40 Financials , Bonds , Economics
The Donald may not be a master communicator but his insights are better than most on CNBC. The word "decimation" is derived from a Latin word "decimare" meaning "to punish every tenth person" or "to select by lot and kill one in every ten". Most persons seem to think that "decimate" implies a 90% reduction, not a 10% reduction as in the Latin root word.
Posted by: MurryMom at May 3, 2005 9:39 AM [link]