Government's Falling Influence

On today’s show we are talking about the shrinking influence of governments around the world. Politicians act as if they can control what happens within their borders. They act as if the national economy is under their control, and that if they set the rules for the nation, they can control what happens within their borders. 

But the fact is, we have a globally interconnected world. 

It’s becoming more and more difficult for governments to control what happens within the borders.

The Euro dollar system which involves the movement of funds internationally can have as large an influence if not even greater influence on financial markets than governments. Investors influence the market more than governments do. 

Interest rates around the world are going down all over the world. Central banks are not doing much to push rates lower. The Fed did not lower rates this past week. The bank of Canada kept rates constant at the December meeting.

ECB officials agreed Thursday to hold the bank’s deposit rate at 4% for a second straight meeting. The Bank of England Thursday also announced that it would leave its key rate unchanged for a third straight meeting. The Swiss National Bank on Thursday kept interest rates on hold at 1.75%.

So then why are rates falling?