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No, only 25 basis point increase now and much more to come. I see interest rates going up as high as 30% this time around, Volcker raised them over 20% in early 80's. We need to start destroying debt. Almost all companies have more debt today that they did in 2009; and almost all companies are furiously buying up their own shares to try to hide the dismal truth about this recovery. Recovery? Where? In America? What recovery ever needed trillions of FED money-creation, ZIRP for 7 years, and the trumpeting of new part-time and minimum-wage jobs to make the administration running things claim success?
The fly in the FED soup is becoming more real every day now. The strong US Dollar is threatening to destroy the fragile facade of calm the FED has woven for the last 14 years. QE and ZIRP are anti-Dollar ruses. The FED has been committed to the wounding of the Dollar in order to force up asset prices, stocks, commodities, and housing. A strong dollar cripples all those markets.
The only thing that can keep the Dollar from rising is MORE QE. And the FED seems to have used up it's political capital for QE, which people now understand, is nothing more than a transfer of trillions of dollars from America's future to the richest people in the world today, a grand theft casino operation. Yes, QE did save the banks, the very people who caused this crisis.
The strong dollar will sink all the assets the FED has inflated: stocks, commodities, housing. God Bless the Strong US Dollar!!!
In summation: the top 1% get the wealth and everyone else gets the debt. In other words economic repression.
You're doing it again, assuming everyone else made the same decision as you did to stay out of the stock market and park your money in a savings account earning 0.5%.
Your failures in the realm of personal finance are not shared by all, many in this forum have mentioned that recent times have been very good for their balance sheets.
misery loves company ,you know that . no one likes to have made poor choices and bad investment decisions alone . so those who missed the boat by either believing their own bull-sh#t or because they don't understand investing so they don't complaining and not playing that hand they were dealt high five each other and pat each other on the back and they feel better .then they count the minutes to the big supposed collapse so everyone loses their gains and they can be right.
you know the drill , it is the same vision the gold bugs have in their heads for decades now .
Last edited by mathjak107; 12-24-2015 at 03:08 AM..
Yes, I understand how lower interest rates pushes up the stock market and benefits primarily the top 1% to the detriment of everyone else. Anything else should I know?
It benefits millions of middle class stock and home owners. Stocks and and homes are 2 very major ways for the middle class to save, gain, succeed and retire on.
How and why did you retire at such a young age? And where are your savings and cash flow?
"As of 2013, nearly 50% of stocks and mutual funds were owned by the wealthiest 1% of Americans and an additional 41% were held by the next 9%, according to research from Edward Wolff, an economist at New York University. According to Mr. Wolff’s data, based on the Federal Reserve’s Survey of Consumer Finances for 2013, the bottom 90% of U.S. families owned only about 9% of stocks and mutual funds."
What we have is a Centrally Planned Banker Oligarchy that is swiftly redistributing wealth to the top 1% while the debt nicely flows to the bottom 99%. This is Serfdom and Economic Repression.
The rich get richer,
And the poor get poorer.
In the morning.
In the evening.
Ain't we got fun.
It benefits millions of middle class stock and home owners. Stocks and and homes are 2 very major ways for the middle class to save, gain, succeed and retire on.
How and why did you retire at such a young age? And where are your savings and cash flow?
If you care to answer of course.
I worked hard and applied my skills to the best of my ability. Ditto for my wife and it looks like my son is working in the same direction. He left his "job" on Wall Street because he couldn't stand being part of what he was observing.
One of the greatest influences on interest rates and the cost of borrowing is population age demographics. In simplified terms, this means when you have a young population, there are more people borrowing than saving. In turn, this drives up the cost of borrowing money as there is less on the sidelines to go around.
On the other hand, when you have an aging population (as we have now), more people save money than borrow it. This drives down the cost of borrowing as there is all kinds of money older people have saved that the banks have the ability to lend out. This is why most economists have been saying that interest rates are going to stay low for the forseeable future.
The fed raised the rates only a quarter of a percent. Either they are simply attempting a "stress test" to see what if the economy can handle it, or they are trying to create a buffer in the event of further economic turmoil (or both).
I have to about totally disagree with all you said here.
Low interest rates = lower costs of borrowing. Period.
In crude terms our aging population will now be spending more. They are 'done' saving.
There is no longer any set limit on what can be lent out. Banks will lend to all willing and hopefully sensible borrowers. More borrowers does not limit future money available anymore due to Fed policy. Reserves are in great excess now, and any bank can lend first, get more reserves later if necessary.
Loans create deposits! Fractional reserve is passe.
The big deal of the Fed interest rate rise is to state in broad terms that our economy is on the mend. We can now move on up to more reasonable interest rates as the economy can handle it. Sure they can lower it again, but by now they are more secure in that they won't need to.
Question: Why not ZIRP forever? Money without interest? Why not give the poor and middle class more of a break? And going farther, why not create money without debt?
If you are not familiar with the following, you are still in a fractional reserve mindset:
but i will finally be able to make some money on my saving account
So far, as far as I can tell, interest rates have not risen on savings accounts deposits. Only $180 billion dollars had been drained from the system and it will take close to a trillion to have any meaningful effect for savers. Economic repression continues.
I worked hard and applied my skills to the best of my ability. Ditto for my wife and it looks like my son is working in the same direction. He left his "job" on Wall Street because he couldn't stand being part of what he was observing.
You don't need to answer.
I worked hard and applied my skills to the best of my ability as well. Still not retired, but I could thanks to persistent saving and investing. Maybe not to the level of the 1%, but it is nice to know I can retire anytime, thanks in large part to my stock program.
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