Thanks for the graph.
Apparently the Fed likes to turn on the money supply during a Big Government administration.
Posted on 12/27/2018 11:52:59 AM PST by COUNTrecount
Embattled Federal Reserve chairman tells White House officials he'll meet face-to-face with Trump in bid to end feud that left stock markets reeling over fears president will fire him
Dow Jones closed up 1,086.25 points, or 4.98 per cent, on Wednesday
It was the stock index's largest single-day points gain in U.S. history
Follows biggest-ever Christmas Eve plunge for markets on Monday
White House officials tried to soothe fears over Trump's fury at Federal Reserve
He's upset about rate hikes and reportedly said he wanted to fire the fed chair
Federal Reserve Chairman Jerome Powell is now telling the White House that he'd be willing to meet with President Trump to discuss their differences
The president and the federal reserve chairman have been on an untenable collision course that has delved into the murky waters of whether the nation's chief executive has the authority to fire the head of the United States' central banking system.
Federal Reserve Chairman Jerome Powell is now telling the White House that he'd be willing to meet with President Trump to discuss his concerns about the independent agency's rate hikes, the Wall Street Journal reports.
A face-to-face chat with Powell could quell some of the president's anger about the Fed policies that Trump blames for the dramatic stock losses an instability in the market, despite a sustained unemployment rate of 4.1 percent or less over the last 14 months.
'A meeting between the two should be helpful,' Larry Kudlow, head of the president's economic, told the Journal. 'Right now, their relationship is like a stock looking for a bottom. There’s only upside.'
(Excerpt) Read more at dailymail.co.uk ...
Go back to the example of the butcher and the baker. If the butcher buys $1 worth of bread from the baker buys $1 worth of meat from the butcher, then you have $2 of GDP for $1 of money supply. If the butcher buys $1 worth of bread but the baker sticks that money in his mattress, then you only have $1 of GDP for the same $1 of money supply. Adding $4 to the system does nothing to support growth unless the baker starts buying meat from the butcher. It just makes the $1 loaf of bread cost $5.
Here is my take on this. Fat cat investors ( most after inheriting their money ) play the Stock Market while interest rates were low and money was pumped into equities. Now the fat cat gamblers, having made a boat load of money in the Stock Market over the last 10 years, want to take their profits and park it in cash and earn a nice rate of return. This is so less stressful on them and maintenance needed on their portfolios is greatly reduced. So they, the fat cats, always want the game rigged in their favor. F them.
The baker goes out to buy a new American made truck and gets his house painted by Americans because the economy is good and psychology and politics play a huge role in confidence.
When that person is the Fed Chair, yes it does.
Congratulations. You've just become an open-borders advocate. LOL.
You lack understanding, sister.
And you seem somewhat paranoid, where the slightest bit of disagreement with your own worldview translates into being a traitor to the country and it’s ideals.
Look it up - even President Trump himself a few years ago complained that the Fed should start ramping up interest rates, but they were not in order to make 0bama look good.
Nobody here is “turning” on President Trump.
How does the fat cat investor earn a nice rate of return when interest rates for safe investment-grade securities are actually LOWER now than they were two months ago — despite the recent FED rate hike?
LOL.
Give it time. Banks will have to attract new money with higher rates. It's how the "system" works.
Bank rates are tied to U.S. Treasury rates — which were lower on Christmas than they were on Halloween.
So that will never change? The pressure is upwards now.
“Yes. We pay Currency Interest in the form of dissidents”
Whatever that’s supposed to mean.
“A MANDATED currency IS the bill whenever a free voluntary currency is cheaper.”
You didn’t explain how the currency you’re now using is costing you anything.
Free voluntary currency already exists. ‘Ithaca Hours’ is an example, it’s been around since 1991. You just can’t demand that others accept it as payment.
American banks used to print their own money and still can. They don’t do it because issuing checks works much better.
I didn’t see your explanation of why the money growth during Carter didn’t grow the economy. Maybe you’re still working that out.
And you haven’t yet explained how the double digit interest rates during Reagan allowed the economy to grow rapidly. Your argument being that low interest rates are required in order for the economy to grow at all.
During the Carter years workers still had a lot of union political power to increase wages along with inflation. That threat is gone forever due to offshoring, out sourcing and unbridled immigration. Workers have zero power in the USA. IT IS NOT THE 1970's ANYMORE.
Which has absolutely nothing to do with effects of interest rates and money supply growth.
But I can see why you’d prefer to change the subject.
So besides hurting Trump, GDP and Main Street what are the benefits to raising interest rates at this time?
Thanks for the graph.
Apparently the Fed likes to turn on the money supply during a Big Government administration.
Banks cannot issue their own currency.
The word “dollar”, a common word is banned. The Fed does not need to no knock down doors when banning common words is simpler and everyone gets in line.
The State could ban the words “bread” and “water”, and other derivatives, then sell their own monopoly at inflated prices.
Power is spread by allowing non threatening money alternatives to flourish. Once a money threatens, it’s Intellectual Property is stolen and the dissident owners are in prison. That has happened. The process is similar to shadow banning.
The Fed’s primary role is to protect Congress from their bad decisions, replaced with the Fed’s own poor decisions. Historically the Govt created money directly, got greedy and were thrown out of office. Now the people are screwed but Govt stays in power.
I enjoyed your discussion, both Pelham & central_va, you both are knowledgeable. :-)
I have scoured the internet for years, but a good source explaining the Fed Reserve and practical economics is still sadly elusive. So we are all left with what we know.
Interest rates on U.S. Treasury bills are driven by our national debt. When the world loses confidence in our inability to pay our debt without massive inflation, then the rates will rise. They haven’t risen very much, so the U.S. is still seen as a safe haven even with $22 trillion in debt.
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