Along with the other usual daily propaganda that hits my inbox, I got an email that begged me to sign a petition to tell the Fed not to raise interest rates. Though the left has been in the tank for trickle down economics for a long time now, I felt like there probably could not be any better sign that it is long overdue to raise rates.
For years now, we have been subsidizing those who make a living off the markets. I'm not going to rehash this. But, I found it truly fascinating that after years and years and years of being fed pure bullshit by Greenspan et al., the intelligentsia of the left now believes in trickle down economics. IE, if we raise rates, we kill the opportunity for someone else to come along and create more shitty service jobs and crunch their face up in indignation when it's noted they are just creating more shitty service jobs that have no future whatsoever.
I've opined before that I believe it would be painful to those with assets to raise the strength of the dollar and start deflating the paper value of those assets. This isn't going to help the middle class in the short term, but then again, perpetuating this endless cycle of inflation for goods with no raises for workers while profits remain at ridiculous levels isn't doing a damn thing either. A stronger dollar for a person with money but no assets would give workers a teeny bit of power they don't have now.
I gave Bill Clinton the benefit of the doubt for falling for Greenspan like the rest of the world did. Now that that hack Greenspan is gone, it's time to start ending the perpetual subsidy for banks and investors. Maybe people who save money rather than spend it might actually be able to look forward to a day again when they actually get to make some money on their savings rather then just letting the free loaders in the bank live like the leeches they are.
Forgive me if I chuckle a bit. In my estimation the fed blew it in 2000 resulting in the amazing Clinton era jobs creation and tax revenues resulting in a tech wreck that blew up the Nasdaq and we are seeing a repeat of that eventuality again only this time the Fed has shot its wade trying to contain its 2007 mess. I can’t tell if the institutional apparatus in America is actually trying to destroy the country or is absolutely inept in seeing the hazards they create. As I said long time ago, the medicine of clearing out the dead wood in the banking/financial industry would have been plenty painful but the recovery would have been real and lasting and no doubt much fast than this ‘recovery’. For anyone who believes that this fed driven, fiat currency enabled ‘recovery’ was real... hold on to your hats... and if you are having doubts... too late, those HFT operations are way faster than you..........
ReplyDeleteDon’t hold your breath hoping China will be able to pull a rabbit out of its Chinese Communist Hat either... they will be lucky if they don’t have another revolution.....
I think the Fed has been blowing it since 1987. I could rail on Greenspan for as long you could stand in the senate and filibuster quoting the constitution. Whether we would have been well severed by letting multiple institutions fail like we did Lehman is really just an exercise in speculation. Classic economics would preach that any institution that can't sustain itself should be allowed to fail because it cleanses the system of excess. And my whacked view of course, is that context matters.
DeleteAnd the right worships those who have used the low interest rates to grow and gain wealth out of the other side of their forked tongue. Kinda like welfare in a way ain't it?
DeleteIt's been an absolute welfare program, first and foremost for the banks. Conceptually, I get what Greenspan was trying to do. But even he admitted later that he found a "flaw in the model that believed had been working flawlessly for 40 years". he never did clarify that further, but I always believed the flaw he found was that people dont' act rationally or ethically when a lot of money is involved.
DeleteSpeaking for myself, I have never seen money as anything other than a medium of exchange. Never before the inception of a central banking system and of course the more fascist approach to governance was it used to actually pull the levers of business. Never before have so few bright sparks ever attempted to second guess the billions of transactions completed every day between willing buyers and willing sellers who came to their transactions for as many reasons as nature has biodiversity.
DeleteCurrent low interest rates have hurt retirees who rely on IRAs and other instruments such as 401Ks and 403Bs, T bills and T notes for their income. I agree, it is time for the fed to allow interest rates to rise again, as long as inflation can be kept in check.
ReplyDeleteWonder where the US will get the additional taxes to pay the higher interest payments.
DeleteQuarter percent is chump change but bump that puppy up 2 percentage points on 18 trillion over few years will put the hurt to the old US budget, whatever that is.
DeleteIt's not a irrelevant point, but the only question really is how fast does it get there. our entire 18 trillion is not going to be rolled over in a single refunding event. We've issued a lot of debt at very low rates all the way across the curve. yeah, the short term paper roll overs are gonna hurt a little, but it's not gonna come all at once.
Delete40% of our debt is rolled over every year not to mention the new debt added.
DeleteAfter a few years, we are sure to see the deficit rise.
What is Hillary Rodham Clinton ' s view on all of this? She wants to give away free college education and raise taxes on the Donald Trump ' s of the world. I think Janet Yellen, HRC, and Christine Lagarde should hold a pow wow and straighten all of this out.
DeleteOh I forgot, Joe Biden is waiting in the wings. They say he's chocked full of all sorts of creative ideas to fix our economic house. Oh goodie! But Joe, where have those great ideas been hiding the last seven years?