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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ
09 April 2018 | Pago Pago, American Samoa
10 March 2018 | Pago Pago, American Samoa
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22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
22 August 2017 | Pago Pago, American Samoa
09 August 2017 | Pago Pago, American Samoa

More On Debt and a Stable Economic Environment

06 March 2015 | Pago Pago, American Samoa
Kimball Corson
Borrowing makes sense in a realistic and uncompromised interest rate environment when the present value of profits from a real investment sufficiently exceed the on-going costs of borrowing at such rates to make that investment contemplated worthwhile, given the macro economic uncertainties involved. This is true both for private debt and public debt that is incurred for real investment purposes. The system fails and excessive private debt is incurred, however, when the natural interest rate environment is compromised by federal intervention in pursuit of a zero interest rate environment. Investment cues and signals become masked and skewed in the direction of incurring excessively debt, now for whatever purpose.

In short, the Fed has destroyed the natural interest rate cues, has provided false real investment signals and, as a result, has induced massive private debt formation, not only in regard to real investment efforts, but also in regard to borrowing for all other purposes as well. Debt servicing too largely looks only to repayment of principal.

The Fed thinks it is helping, and it did immediately after the crash, but the simple truth is the Fed's continuing policy of attempting to regulate the economy by interest rate control and manipulation has destroyed the true calculus and market for real investment and it has undermined the economic stability and certainty needed for real long term investment by escalating private debt to too precarious levels. Also, by excessive QE, the Fed has also pushed stock and bond prices in secondary financial markets to excessive and precarious levels as well. By these means, the Fed has unwittingly destroyed the stable and more certain economic environment needed for long run real investment.

The Fed's role, and its tools and how it uses them, need to be reevaluated. It has badly erred here.
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Vessel Name: Altaira
Vessel Make/Model: A Fair Weather Mariner 39 is a fast (PHRF 132), heavily ballasted (43%), high-aspect (6:1), stiff, comfortable, offshore performance cruiser by Bob Perry that goes to wind well (30 deg w/ good headway) and is also good up and down the Beaufort scale.
Hailing Port: Lake Pleasant, AZ
Crew: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
About:
Kimball Corson: I am a 75 year old solo sailor, by choice. However, I did take on a personable, but high maintenance female kitten, now a full grown cat, named KiKiPoo when she is sweet, or KatKatPo after she has just killed something like a bird or bat. [...]
Extra:
Although I was a lawyer and practiced law with good success for thirty years, creating significant new law, I never really believed in the law, the politics of law or in the over reaching self-interest of most lawyers I met. Too much exposure to Nietzsche and other good and seriously thoughtful [...]
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Profile

Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ