Posted on 08/26/2015 5:12:03 AM PDT by expat_panama
That wasn't your original claim.
but the money supply would only be available to the insiders.
No longer the case?
The reason FDIC insurance on CD savings was passed after the depression was for that very reason, so average folks could put money aside and feel secure that it wouldn't be lost if there would be another economic meltdown.
I don't know if I'm unique among those who have to watch the budget. I'd be MORE likely to invest a little more in the stock market if savings were gaining interest. That's because I'd know how much to plan spending my minimal savings. I'd probably increase my weekly budget allotment and spend that money locally (restaurants, movies etc). I just don't see any evidence that 0% interest on savings encourages anything except turning Wall Street into a casino where only the biggest gamblers win. It has people turning to economic schemes that might or might not benefit them but sure are good for those who manage their money.
The monetary expansion will be limited to the stock market. Of course, not all those in the market are insiders. However, those likely to profit individually are the insiders. Moreover, as the middle and lower upper class shrink, the relative contribution from small investors declines as the contribution from large institutional investors increase (big banks, large multi-national corporations, governments). Increasingly, the stock market is becoming a game only for the big boys.
My main contention is that monetary expansion will be limited to the stock market and it will not easily get out into the general economy in the form of consumer spending. That way, we won’t see that much inflation. Raising interest rates also reduces money velocity and supports the dollar.
My other point is that the large market swing is ideal for insiders such as big banks and pols.
That’s it.
When they buy bonds, why is the monetary expansion limited to insiders? Or were you mistaken?
Yes, there's another big part of the problem.
Also, if a Republican is elected president in '16 and the rates go up then, he/she will get the blame for the continued stagnation when the fault is all the Dims & 0bama's past spending and regulations. You can count on that happening!
If the fed does a rate hike and the economy tanks the fed gets the blame by the el-presidente. If they don’t and the economy tanks what can they do, no bullets left in their imaginary gun. The fed has allowed all the BS economic data shoveled the last 6 yrs. from el-presidente’s regime to go out as gospel knowing it was a lie and backed themselves into a corner.
I had a liberal friend argue, the economy is great, 5.4% unemployment! I said really, you believe that with 94 million eligible people out of work and layoffs everywhere, do the math the numbers don’t add up. Are you going to believe what el-presidente tells you or your own eyes? They believe their beloved el-presidente in the presidential palace, he would never lie!
Another “dead cat bounce” today? Or was the bottom Monday?
Your friend knows 0bama doesn’t lie. He knows because 0bama says he doesn’t lie. /s
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