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Beware the limits of monetary, fiscal and regulatory policies

A cut in policy interest rates, for example, creates only an ephemeral valuation jump.

If policymakers allow speedy and complete pass-through of the lower commodity costs into their domestic economies, and do not offset these benefits with higher taxes and costly mandates, the global economy may soon witness genuine wealth creation and economic growth.

PRIVATE sector venture entrepreneurship, central bank monetary policy, and government tax and regulatory policy can all create - and destroy - wealth. It is good to understand the differences between the three, for the sake of our own financial well-being.

In the past seven years, major...

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