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It appears that no responders are answering the OP question.
"what is the real reason for keeping interest rate low for years ?"
The Fed has said several times that the reason for the low rates is because they fear deflation and the Fed wants to encourage inflation, but for about ten years it hasn't happened. What does this say about the general health of the economy.
thats wonderful,you mean if I paid $482 for GAMEStop,FEd will make me whole by buying from me at $482 when the market price is $48
No, they just wanted to say that they might not let the bottom drop all the way out, which is different from saying they won't allow any drop at all. And it is possible that there was no detailed plan in place to do even that.
NO, you do not get it. USURY is IMPOSSIBLE to operate over any long period of time.
It invariably requires "Crashes" to reset the eCONomy.
Your entire premise is based on the money supply being linked to paper federal reserve notes. In the future there will be no such notes at all. It will be digital currency.
Your entire premise is based on the money supply being linked to paper federal reserve notes. In the future there will be no such notes at all. It will be digital currency.
No, it won't. That's just pure techno-fantasism. We're not going to have the resources and energy to run a global digital currency system.
It appears that no responders are answering the OP question.
"what is the real reason for keeping interest rate low for years ?"
The Fed has said several times that the reason for the low rates is because they fear deflation and the Fed wants to encourage inflation, but for about ten years it hasn't happened. What does this say about the general health of the economy.
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I still remember how we poo poo 5% when we walk by a bank and see how much they paid us,S &L paid 1/4% more and you see a long line of depositors during lunch hour on a payday.
There was inflation then,a $20 bill back then buy you a bag of grocery for two for a week,how much does it buy you now?
My friends and I used to envy folks who make $10,000 /year,then we all shoot for $20K,now an assistant fast food l manager makes $45K-$60 now and have to hold 2 jobs !
I think we have inflation ,if you eat and take drug and drive and pay your utility bills,what tames inflation is productivity,aka automation and cheap foreign labor,takes clothing for example,they are made in China,Pakistan,Haiti,Kuwait and they are pretty good as our clothing manufacturers showed them how ,and then comes electronics,copycats can make them cheaper ,maynot last as long but we dont mind.
Influx of legal and illegal immigrants willing to work for less under the table,how much are you paying your lawn man,when was the last time you give him a raise?
I just looked or cotton tank top on Ebay,I used to pay $5 with free shipping,now it is $7.95-$9.95 if you want free domestic shipping,blame it on cotton,Ebay fees and shipping cost!
Fed chairman keeps insisting rate will stay low until he sees 2% inflation and full employment prior to cov 19,and keep buying treasuries in auction to keep rate low,DOES HE KNOW SOMETHING WE DONT KNOW?
What I WANT TO KNOW is why keep buying and where does the money come from,all we hear is Fed balance sheet is growing,what does it mean?
IS THere a limit on how much can the Fed buy?
We also heard the Fed earns good interest from last binge buying when every wall street firm just shoved all the papers to the Fed and the Fed merrily ate them all up?
inflation is low because there are plenty of goods and services competing for our money,a race to the bottom,let see who can offer us the cheapest price?
we use our credit cards (future earnings) to buy and the foreign manufacturers take our US $ and buy up real estate in San Fran or other parts of California,send their kids to U of CA ,Berkeley,CA and help them buy a condo once they landed a job in USA.
back then we have just one or two credit card,before that there is no credit card,just charge cards and only for those who travel,not any one including students and housewives and pets,now we all have easily 5-20 credit cards in our wallet and our desk ,one guy went to a board meeting for approving his purchase of a NYC co-op and bragged he has 100 credit cards and use it to pay Paul with Mary,his application was denied .
inflation is low because there are plenty of goods and services competing for our money,a race to the bottom,let see who can offer us the cheapest price?
we use our credit cards (future earnings) to buy and the foreign manufacturers take our US $ and buy up real estate in San Fran or other parts of California,send their kids to U of CA ,Berkeley,CA and help them buy a condo once they landed a job in USA.
back then we have just one or two credit card,before that there is no credit card,just charge cards and only for those who travel,not any one including students and housewives and pets,now we all have easily 5-20 credit cards in our wallet and our desk ,one guy went to a board meeting for approving his purchase of a NYC co-op and bragged he has 100 credit cards and use it to pay Paul with Mary,his application was denied .
Good point. It's never been easier to spend thanks to the proliferation of credit cards and other forms of cashless payments.
Your entire premise is based on the money supply being linked to paper federal reserve notes. In the future there will be no such notes at all. It will be digital currency.
Digital currency have to be infinite in order for the other poster's usury model to work.
I think he/she is saying usury is just not going to work because you cannot have infinite currency. With infinite currency you may as well give everyone infinite universal income. No one will have to work.
Digital currency have to be infinite in order for the other poster's usury model to work.
I think he/she is saying usury is just not going to work because you cannot have infinite currency. With infinite currency you may as well give everyone infinite universal income. No one will have to work.
We are already there. The only thing stopping us from printing as much currency as we need is... what precisely?
We're already to the point where "things" are pretty much worthless now, to include posession of cash. We throw out more food than the world's population can possibly eat. People are hoarding cash and just pouring back into the markets for a lack of anything to spend it on.
Look what happened in the pandemic, we shut everything "non-essential" down! We canceled both jobs and school and somehow the economy did just fine and it only hurt 15% of the population. 30% say they're doing better and 55% say they're doing about the same. The stock markets soared to unimaginable heights and look likely to never drop significantly again.
Look at us now, stuff is still half shut down, unemployment's only about 6-7%. We're all working from home, we didn't need those jobs or school after all. Many of those jobs are never coming back because we never needed them to begin with.
Yes, people won't need to work because we don't need them to and in the future we'll need even fewer. There are more people than necessary jobs available for them.
Property, assets, and the ability to command services are all that's valuable anymore.
I think there will be some kind of UBI set up within the next 100 years.
Last edited by redguard57; 04-18-2021 at 06:59 PM..
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