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Fed promises to keep rates low for at least 2 years - Yahoo! News (http://news.yahoo.com/fed-under-pressure-act-world-markets-swoon-050130864.html - broken link)
Can we fire this dip$hit and bring back Paul Volcker?
Virtually 0% interest rates + multiple QE's is as unsustainable as our debt.
Fed promises to keep rates low for at least 2 years - Yahoo! News (http://news.yahoo.com/fed-under-pressure-act-world-markets-swoon-050130864.html - broken link)
Can we fire this dip$hit and bring back Paul Volcker?
Virtually 0% interest rates + multiple QE's is as unsustainable as our debt.
How about firing the whole Fed by abolishing it? The Fed is possibly creating a bubble by keeping interest rates this low for too long. If I remember right, when Greenspan was Chairman and the dot-com bubble burst, the Fed lowered interest rates a lot and gave rise to the housing bubble?
Weakened, flattened, depressed, extended period exceptionally low (to mid 2013) the words used by the FED today are clues. There were 3 votes of decension in today's FED vote (basically a mutiny).
Sounds like a plan to me. Are you guys all wealthy retirees? Sadly, Americans should not be in debt...and god forbid unsecured debt with "variable interest rates." But a lot of Americans are in that sort of debt currently...So keeping interest rates low for a limited time:
1. Allows the people with adjustable rate mortgages that they couldn't refinance to avoid default. A couple of these guys are still hanging on to their McMansions because interest rates haven't gone WAY up. They may not deserve these homes, but whatever...we have enough defaults currently.
2. Allows students with adjustable rate student loans to not default - Hopefully they'll pay attention to the debts and pay them off ASAP before rates rise. A big jump in rates right now would murder a lot of these people.
3. Allows people with credit card interest and lines of credit with variable rates to pay off the balances. If interest rates jumped to say 30%, a lot of people would probably default on the unsecured debt.
So, while nobody should live above their means...I believe an instant jump in interest rates would screw a lot of people...especially banks. LOL I mean, there's nothing to sell if you have a bunch of defaults on unsecured debts.
I don't like banks, but somehow I think a big bunch of NEW defaults now on unsecured debt may not be super peachy for the economy. Thus, I am OK with the temporary reprieve. I thought rates would go through the roof after the downgrade...thus giving the economy a final one-two-punch.
As long as we can do something about employment and innovation etc, then the lower rates kind of gives the US a shot.
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