While the U.S. can’t seem to get their interest rates low enough, Mongolia keeps raising theirs. Their policy rate is at 9.75% and may go higher if this doesn’t check the out-of-control inflation. In the US, I’m a saver, not a borrower, so the low interest rates are poison to me. In Mongolia, I’ll strictly be a consumer, so all I care about is low rates of inflation for myself. Naturally, lower rates of inflation would be of great benefit to the Mongolians as well, but making money impossible to borrow may not help them out of their economic slump very readily.
On a happiernote, a new deposit has been discovered in southern Mongolia, which contains 4,000,000 tons of copper and 398 tons of gold. Not a bad addition to the 32,000,000 tons of copper and 1,000 tons of gold found just to the north last year. You would think finds like that would brighten the economic outlook.
Unfortunately, the Mongolian government seems likely to spoil the deal by grabbing huge portions of the profit. This may be a boon for the economy in the short-run, but how many foreign investors are going to keep pumping money into Mongolia when they see that it’s reverting to a command economy?
Maybe the government needs the tax money to pay their back debts to New York City. It turns out that diplomatic immunity doesn’t apply to property tax evasion.
And, in technology news, Buddhist lamas have dramatically sped up the process of copying their Scriptures by discovering scanners and the internet.