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Why does the FED feel it needs to raise interest rates in September? I think they feel that the global recession will have another major dip down in the next year, and, unless they move interest rates up, they will not be able to lower rates when it comes time to fight the recession. Of course, I KNOW that lowering interest rates does not end a recession. We have been lowering rates for nearly two decades, and we are still in near-recession. The global economy has not recovered. Why? Because the economic growth -call it the Business Cycle if you wish -period ended in 2001. The Business Cycle won't begin again, no matter what anyone does, until DEFLATION is allowed to do it's job.
The economy is NOT recovering. If I were the President of the US I would find a FED chair with the courage to raise rates no matter what it did to stock markets and property markets. We have too much debt. We need to destroy debt in order to be able to have real economic growth. Of course the FED has been telling Americans and citizens of the world that it would protect investors. They have been protecting investors since the first bubble burst back in 2001. At that point we needed to begin discouraging debt. Growth was over. Taking out new loans when the Business Cycle had ended was a catastrophe-in-the-making. Higher interest rates protect the public from bad debt decisions, make it harder to get loans, harder to pursue loans. When there is no expansion, there should be no new loans - loans at the end of the Business Cycle are doomed to fail. But the FED decided it would just lie about things and encourage more debt and push down interest rates to encourage more loans and to eventually force people into investments in risky assets because they would have no alternative. With rates at zero, or even less than zero, cash was not an alternative. People would have to risk their savings by investing in risky assets. The FED seemed to be assuring us all that they had our back, they would not lets housing collapse, they would not lets stocks collapse. They did let oil collapse, and the commodities bubble, by raising rates, supporting the US Dollar.
Instead of raising rates in 2001, we did the opposite, we lowered rates, took on more debt, and are still taking on more debt. You can argue that debt doesn't matter, as long as it is manageable. But look where we are now. We are having to fix interest rates below zero to make our debt manageable, for the first time in human existence. This means it is NOT manageable.) If the FED decides to finally protect the Dollar - which it should have begun doing in 2001 - then we will have all those things the FED has been trying to avoid: deflation, depression, collapse of back promises, international tension, protectionism, world war, and austerity, austerity, austerity.
Strong Dollar will collapse the 'Wealth Effect' the FED has been protecting with great vigor since 2001. It will collapse the Housing Market, it will collapse the stock Markets, it will collapse the commodities Market that has been rallying since 2015, after a strong Dollar almost killed oil and gold and silver and industrial metals from 2012-2015. A strong Dollar is strong medicine. It will cure us but it also might kills us. Strong Dollar will show everyone that this so called recovery was a scam and one big lie and illusion!!!!
ummmm did you consider higher rates would raise bond rates as well causing the debt to increase rapidly also? Low rates = lower cost of debt.
one day he will be right . so if you are going to predict ,predict often
I always wonder about those who are wrong time after time after time. Are they just trying to con others? Or perhaps they have just conned themselves and actually believe their own nonsense? Either way it is sad.
I always wonder about those who are wrong time after time after time. Are they just trying to con others? Or perhaps they have just conned themselves and actually believe their own nonsense? Either way it is sad.
Yes, you all have been wrong all this time and I'm the only one who got it right. It's sad, isn't it,. You all thought that we are in recovery since 2008, that low rates will bring us roaring economy. You all have been fooled by the FED. So after ZIRP, QE1, QE2, QE3 you guys still belive in fairy tales? Amazing!!!
But, don't you worry, you guys are not the only ones who got fooled. People from Japan got fooled too decades ago. We are following in their footsteps now not because we chose it but because no one can rein in the Federal Reserve who clearly doesn't embrace capitalism, believe in America, and thinks saving is a sin.
It's time to wake up, America is NOT recovering. The so called recovery is a lie and illusion. In the meantime, enjoy the dead economy.
Relative to the rest of the world, the US is doing good. If a crisis happens, it will be globally like the Chinese debt bubble popping. OR. Trump somehow gets elected.
Yes, you all have been wrong all this time and I'm the only one who got it right. It's sad, isn't it,. You all thought that we are in recovery since 2008, that low rates will bring us roaring economy. You all have been fooled by the FED. So after ZIRP, QE1, QE2, QE3 you guys still belive in fairy tales? Amazing!!!
But, don't you worry, you guys are not the only ones who got fooled. People from Japan got fooled too decades ago. We are following in their footsteps now not because we chose it but because no one can rein in the Federal Reserve who clearly doesn't embrace capitalism, believe in America, and thinks saving is a sin.
It's time to wake up, America is NOT recovering. The so called recovery is a lie and illusion. In the meantime, enjoy the dead economy.
I'm missing the message here. In what context does it matter if the recovery was a "fairy tale"? All of my assets and income have increased in value substantially since 2008. Why does it matter if my gains were due to a "phantom recovery" or based on voodoo Fed policy? If I recognize that Fed policy is crazy and that certain assets rise because of that policy I might be an idiot if I choose not to take advantage of it. Likewise when the Fed changes direction, new opportunities will present themselves.
Yes, you all have been wrong all this time and I'm the only one who got it right. It's sad, isn't it,. ............
I am not sure what I am wrong about. I frequent this forum to discuss and to learn. I don't come with a lot of theories, or predictions, or ideas that the world is some sort of sham, or the belief that the Fed members are conspirators or stupid or both. I have no idea when the next recession will occur. Nor do I try to predict what I don't understand. About all I can say for certain is that I pay no attention to those who make wild predictions, who believe in all sorts of conspiracy theories and who think they are right and everyone else is wrong.
no, it makes it harder for "you" to get a loan because the bank will decide that you can't pay it back...
Congress needs no such "approval" beyond agreeing with itself when it passes budgets. Interest rates have no influence on US's ability to borrow money. US spending did not "drop" in the 80s because interest rates were 10+%
Simple math, interest rates at 0%(hypothetically) for loans, banks give 0%(hypothetically) to investors. Investors don't like 0%, banks get less money to loan out. A good system would have some balance. Weshould have some balance.
Last edited by Nothere1; 09-10-2016 at 09:37 AM..
Reason: underlining
Relative to the rest of the world, the US is doing good. If a crisis happens, it will be globally like the Chinese debt bubble popping. OR. Trump somehow gets elected.
In a strange way... I kind of want Trump to win for the buying opportunity.
Simple math, interest rates at 0%(hypothetically) for loans, banks give 0%(hypothetically) to investors. Investors don't like 0%, banks get less money to loan out. A good system would have some balance. Weshould have some balance.
Many investors do like 0%, as loans if used for speculation are cheaper and less risky. Investors might like to invest in a business if that business can borrow at 0% for easier and less risky expansion and growth.
With current Fed policies, banks don't need your money to loan out. They have massive excess reserves.
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. You all thought that we are in recovery since 2008, that low rates will bring us roaring economy. You all have been fooled by the FED. So after ZIRP, QE1, QE2, QE3 you guys still belive in fairy tales? Amazing!!!
