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you have to understand that intrest are governement policies. they are reponsible for causing the intrest rate to go up or down. its how they manipulate the the money supply. it has nothing to do with banks. bank simply go by the rules set by the government. so when interest is sucking money out of the economy, you can bet on the governent causing it!!
Short term rates are set by the FED. Long rates are set by the market based on how much money was being created as a result of short rates. Then of course deficits affect interests rates. During the bubble days deficits are the last thing you want. And now that we need a deficit to balance the money supply, the nits want to balance the budget.Lets just get it all backwards shall we? The time to balance the budget is at 3% unemployment, not 13%. I'd say the Fed and Greenspan were the main cause, and they are creatures of the banking system more than government in practice. Stupid politicians thinking high land prices are the road to wealth certainly didn't help. Either way, we are being run by Wall Street.
Short term rates are set by the FED. Long rates are set by the market based on how much money was being created as a result of short rates. Then of course deficits affect interests rates. During the bubble days deficits are the last thing you want. And now that we need a deficit to balance the money supply, the nits want to balance the budget.Lets just get it all backwards shall we? The time to balance the budget is at 3% unemployment, not 13%. I'd say the Fed and Greenspan were the main cause, and they are creatures of the banking system more than government in practice. Stupid politicians thinking high land prices are the road to wealth certainly didn't help. Either way, we are being run by Wall Street.
the crook simply stole someone wealth. what does that has to do with economics.
What does owning land, monopoly rights and tax favoritism have to do with economic output? Its just like robbery. Nowadays people buy land on leverage until it reaches the lowest marginal return with respect to financing. This is returning us to feudalism by creating expensive access charges because all land it paying an interest tax. If we were not bidding against each other with what ever available credit there was, we wouldn't pay this tax.
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the crook simply effected the economic status of the person that was rob. too bad for that person call the police!! economics is all about common sense. pattern recognitions IS what the government uses to manipulate the money supply and IS NOT doing a very good job at recognizing or vetting patterns. crooks steal wealth that can be recovered, government destroys wealth that can never be recover!!!
I think banks printing money for rent seeking and land speculation destroys wealth. Rent seeking end with the French Revolution.
Government has no motive to do anything like this. If anything it has a motive to serve the people because they will be voted out of office otherwise. The problem is its a rather weak motive and special interests have a strong motive to expand their markets and destroy their completion. Its the private interests that drive government corruption.
I believe that it is a bad thing. why would anyone in their right mind loaned money out, put it at risk of loss for no gain!! correction, the U.S government sells secutities to the public at a fix price. if however there are no taker for all of the securities. the central bank steps in and purcases already outstanding government securities from the public.
Those who loan money to the U.S. Government, do so because it is the safest investment on the planet. For that safety, they are willing to accept low returns.
Auction participants bid competitively or noncompetitively. Competitive bidders indicate the minimum yield they are willing to accept for a specified quantity of securities. Noncompetitive bidders specify the quantity of securities they are willing to buy at whatever price is paid by successful competitive bidders. All noncompetitive bids are accepted (subject to quantity limits). Competitive bids are then accepted in order of increasing yield until the offering amount is covered. All successful bidders pay the same price, computed from the highest accepted yield.
Within minutes of the auction deadline, the Treasury releases the auction results, including the highest accepted yield, the associated price, and, for notes and bonds, the coupon rate of the new security. Also announced are the quantity of securities awarded to the Fed, the quantity awarded to foreign and international monetary authorities for noncompetitive bids made through the Federal Reserve Bank of New York, and the quantity awarded to other noncompetitive bidders. In addition, the Treasury discloses the quantity of securities awarded to investors in TreasuryDirect.
Also within minutes of the auction close, the Treasury releases a post-auction addendum with information on competitive bids and awards by bidder category. This announcement discloses the quantity of securities that primary dealers, other direct bidders, and indirect bidders have bid for, as well as the quantity of securities awarded to each of these groups. Primary dealers are institutions that have a trading relationship with the Federal Reserve Bank of New York; other direct bidders are financial institutions that place their bids directly with the Treasury. Indirect bidders are bidders that place their bids through direct submitters; this group includes foreign and international monetary authorities that place their bids through the Federal Reserve Bank of New York.
These are the same people who listen to Peter Schiff who is not an economist by any measure.
Not that I like Schiff and his gold standard, but given the economic mess we are in, how many real economists are there in charge?
Michael Hudson is one that comes to mind. But then he draws on the classical theories ,and has a superior brain trust than what you see today. Most economists pretend they follow Adam Smith when in fact they support the opposite.
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