Posted on 12/27/2018 11:52:59 AM PST by COUNTrecount
If an economy consists of a butcher and a baker and nobody else, low interest rates may allow either of these business owners to expand their operation, but that's it. Maybe the butcher can produce 20% more meat and the baker can produce 20% more bread, but if the demand for meat and bread doesn't change then the GDP of this economy will not grow.
POTUS: “Hey, thanks for coming by. We’re going to audit you. Ham or turkey?”
Your post is ridiculous. Low interest are key to economic growth and Trumps political survival. Their only down side is is inflation ( no sigh of that) and some old people end up eating dog food. Ha ha.
-——Uh....how about we just FIRE the WHOLE FED. The people running it are EVIL and there is no reason on earth why THEY should control our lives.-——
Wow....I never knew the Fed controlled my life .....
The thought that was my wife’s job....!!!
“As for Thorium/energy, Fedzilla need only get back to its rightful size (and out of our way/lives otherwise) should be left to the states.”
I didn’t mean the Feds control Thorium energy, just that they should get out of the way so we can adopt it. Actually, it is the Pentagon who put the clamps on Thorium development decades ago. The reason? It doesn’t produce weapons-grade plutonium.
You know how the NeoCon nutjobs have to have perpetual war.
Actually, there are plenty of reasons interest rates should be higher - they should have started raising them ten years ago.
In fact Janet Yellen tried but got slammed for it, then she turned dovish for the rest of her term.
President Trump in 2016 (and maybe before) said himself that rates need to rise.
Artificially low interest rates for an extended period of time are problematic the real economy, which in turn hurts the middle class and upper lower class quite hard.
“Your post would make more sense if interest rates on U.S. government bonds were rising dramatically.”
Not sure what you mean. Can you elaborate?
The stock market decline has a lot to do with public pension funds.
Another reason for Trump to be greatly concerned.
Couldn’t agree more and could not have said it better.
I have to wonder how the hell it ended up making 5 billion per quarter. THAT is a lot of money for a virtual company that doesn’t require heavy investment.
This is flat-out wrong. Let's go back and look at the top annual GDP growth rates since 1970 and see what the FED discount rate was at those times:
1984: Annual GDP growth 8.4%, FED rate ranged from 8.37% to 9.00%
1973: Annual GDP growth 5.9%, FED rate ranged from 4.77% to 7.50%
1978: GDP 5.6%, FED rate 6.50%-9.50%
1976: GDP 5.4%, FED rate 5.25%-5.79%
1999: GDP 4.9%, FED rate 4.50%-5.00%
Now compare that to the period from 2012-2016. The FED discount rate was 0.75% all the way up to 2015, then rose to 1.00% in 2015 and rose again to 1.25% in 2016. Here are the GDP growth figures for those years:
2012: 2.2%
2013: 1.7%
2014: 2.6%
2015: 2.9%
2016: 1.5%
This is joke. Ask anyone who builds houses if they want interest rate to go up. Ask anyone buying a house if they want interest rates to go up. Ask anyone starting a small business in need of a loan if the want interest rates to go up. Ask any investing in new infrastructure/machinery if they want interest rates to go up.
But those are Main Street concerns ans not a worry of the "investor" class.
Look around we are in the political fight of out lives. This no time to risk a slowing economy which will doom President Trump and the republic. Business IS political and politics is business. GET USED TO IT.
The whole economy is artificial i.e. political.
10 yr Treasury bond % yield
Dec 30, 2013 - 3.006
Dec 29, 2014 - 2.123
Dec 28, 2015 - 2.275
Dec 27, 2016 - 2.446
Dec 26, 2017 - 2.405
Dec 27, 2018 - 2.773
At this rate we might get all the way back to the rates that existed at the end of 2013.
Of course the 10 yr was yielding 3.232% last November 8th, before the last Fed funds raise, and it’s fallen since.
Funny how all the “world’s gonna end because of interest rates” hysteria didn’t start until after the last Fed funds rise on December 19th. Were the chicken littles asleep in November? You didn’t hear a peep out of them before because the stock market didn’t have their attention.
I am starting to consider the “investor” class an enemy of the people.
“Low interest are key to economic growth “
US Prime Rate during the Reagan years:
January 2, 1981 - 20.50%
February 8, 1982 - 16.50%
January 11, 1983 - 11.00%
March 19, 1984 - 11.50%
January 15, 1985 - 10.50%
March 7, 1986 - 9.00%
April 1, 1987 - 7.75%
February 2, 1988 - 8.50%
February 10, 1989 - 11.50%
Seems as if those high prime interest rates didn’t kill economic growth during the Reagan years.
Compare that to Obama, who had prime rates from 3.25 to 3.75 and somehow didn’t have an economic miracle.
Current Prime Rate, December 20, 2018 - 5.50%
Like I said the whole fed circus act is the control inflation by selling bonds at a high interest rate to shrink the money supply and to reduce inflation. The shrinking money supply slows the economy IT HAS TOO. That is how it works. That is fact. You cannot argue with that. Stop it you sound imbecilic..
President Trump is smart and completely unbridled. He will force the Fed’s hand regarding their failed policy which once again is expected to be placed on the back of the populace. END THE FED NOW!!
The Federal Reserve is the Enemy of the People.
Print a competing currency at zero percent interest.
Solutions are just so simple.
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