Posted on 12/27/2018 11:52:59 AM PST by COUNTrecount
The Fed raised the Fed Funds rate by a quarter of one percent. The Fed Funds rate is the price that it charges to commercial banks that need to borrow money overnight.
The Fed Funds rate is now 2.5%. In 1981 it was over 19%.
The Fed needs to have room to drop rates in the event of a recession. The historic sweet spot for the Fed Funds rate is 2.5% to 5%. So it’s only at the lowest point of that range after a decade of being close to zero.
Index traders can make money during swings like that if they guess the correct direction.
But I doubt that there is a way to determine whether there has been an increase in aggregate wealth from that trading. What they do would be a small blip compared to pricing the entire stock market.
And it is within the political sphere that we attempt to implement these solutions.
The political sphere and the government class does not advance itself by solving problems, it advances itself and its members by keeping the problems that exist and creating even greater problems.
And therein lies the root of our trouble.
Economic growth comes from two places: population growth and productivity growth.
If the population is flat for a full year but productivity grows at 2%, then you'll have 2% growth. The same holds true if productivity is flat but population grows at 2%.
If population and productivity both grow at 2%, then you have compounded growth for the year of 4.04% (2% on top of 2%).
The U.S. has underlying problems that constrain this growth, so growth rates of 5% or more are not sustainable unless one or both of these change dramatically.
The Fed hasn’t got ‘tight control’ of much of anything, as their experience in the 1970s illustrated to their chagrin.
The ‘bond vigilantes’ beat the Fed up on a weekly basis. The bond market is much bigger than the Fed.
The Fed has influence over bank lending. They can control to some degree the amount of loanable money in the banking system. That’s one of their primary roles.
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The Fed doesn’t coin money nor does it make loans to the government.
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Pray tell, just what DOES it do? Aside from generating 0s/1s and...charging interest (aka loan)
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The Constitution is silent on paper money and credit, which banks have had the right to create since day one.
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Incorrect on the 1st part, it states EXPLICITLY what *money* shall consist (gold and silver). That banks can set loan/savings rates (aka CONTRACTS) is not in dispute...they CANNOT ‘create’ money.
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The government borrows money from investors. The Fed is not an investment bank and any earnings the Fed has go to the Treasury.
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I fail to read of the Fed.Res in my copy of the Constitution. Maybe you can point out where Congress was given this great ‘latitude’
I do note an A1S8, 5th, 9th, 10th & 13th that specifically states (economic) slavery is verboten (aka ‘borrowing’ to spend on any # of illegal, unconst. program/dept/agencies/edicts/’wants’...).
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Bring all our military and human resources home from around the world, putting an end to senseless, endless, and expensive NeoCon wet dreams. Stop the illegal invasion cold and get rid of all the illegals here now. Adopt the widespread use of Thorium energy.
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One only needs do ONE thing to make ^, and more, self-correct: uphold and adhere to the Constitution.
Return to Constitutional $$ and an elimination of the welfare state would do that and more
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.
“Regulate”: ‘to make regular’...not ‘to control’
So if it’s the Fed’s fault that the Dow took a dive then is it the Fed’s fault that the Dow is up 1300 over the past two days?
There's no reason for Powell to resign. Trump appointed him in the first place.
The Fed needs to be dead. Why the American economy hinges on these money czars is insane.
There’s no reason for Powell to resign.
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Being wrong is a great reason to resign.
Great information!
More bubbles to burst while a few profit from selling short.
You need to do some research. The FED makes all of our money except for literal, actual, coins. And yes FED does indeed loan money to the federal government. Mountains of it created out of thin air.
I would not call him embattled.
Coining money is just that. Coinage. That’s all that the Constitution reserves for the government.
The Bank of North America was a private bank chartered by Congress in 1782. The Articles of Confederation Congress. It printed and coined its own money.
When the Constitution was ratified seven years later only coinage was prohibited. Bank of North America could still print money, and so could other private banks.
Banks from 1789 right up to 1913 often printed their own currency. Google National Bank Notes and you’ll see plenty of it.
Banks still have the right to print their own currency, but they don’t because they can create money via checkbook entry.
“Incorrect on the 1st part, it states EXPLICITLY what *money* shall consist (gold and silver). That banks can set loan/savings rates (aka CONTRACTS) is not in dispute...they CANNOT ‘create’ money.”
Well you’re completely mistaken on that. Banks have always had the right to create “credit money” aka “bank money”. It’s the very definition of banking. Plow through Ludwig von Mises’ 1912 “The Theory of Money and Credit” if you want to read an authority on the subject. It’s very dull reading but you’ll learn about the history of money and banking, including that of America.
“I fail to read of the Fed.Res in my copy of the Constitution. Maybe you can point out where Congress was given this great ‘latitude’”
As was mentioned before the Constitution is silent on banking and paper money. And that’s what the Fed deals in. Congress has the ability to legislate banking. It began doing so in 1782.
“The FED makes all of our money except for literal, actual, coins. “
You must mean other than the Bureau of Printing and Engraving which produces all of our paper money.
And other than the credit money created by thousands of loan officers in thousands of local banks around the country. Fractional reserve lending, new money created via check by local banks to finance loans.
“And yes FED does indeed loan money to the federal government. “
The Treasury is the borrowing agency for the federal government. Congress creates the national debt and the Treasury auctions that paper to investors. Investors loan the government money.
Is the Fed allowed to act as an investor and purchase this government debt at the Treasury auction? No. The Fed has to purchase Treasuries in the secondary market, from investors.
“You need to do some research. “
One of us needs to.
The rise interest rates hurts GDP and hurts Main Street which is no concern to globalist Free Traitors™.
GDP growth is very connected to interest rates.
There is no reason to raise interest rates at this time except to slow GDP growth and to hurt Trump.
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