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It's not the Fed... It's all the excess cash being hoarded right now.
That's not it at all. If interest rates went to 8% then the banks would be forced to pay savers, that would spell the end of the DOW fantasy camp we've been on for the last 7 years. As soon as banks start paying savers again, the Dow will be right back at 7K.
Fed prints trillions, money collects with banks and the 1%, driving interest rates lower.
Had the Fed actually airdropped* trillions to the masses 2010-now things would be different.
The recovery has been OK, but nothing like the 1990s post-recession expansion:
shows p/t employment has about returned to "full employment" of the Bush Boom but full time positions are still millions short of what full employment looked like in 1998 and 2007.
p/t people clearly don't have the wage negotiating power they did in the 1970s, and the gap in full-time employment means there's a reserve army of millions of unemployed keeping wages down there.
* like from a helicopter
That's not it at all. If interest rates went to 8% then the banks would be forced to pay savers, that would spell the end of the DOW fantasy camp we've been on for the last 7 years. As soon as banks start paying savers again, the Dow will be right back at 7K.
Do you understand how a free market works? Interest rates are set by supply and demand. They don't just "go" to 8%, market conditions drive rates either up or down...
The days of savings earning money for nothing (e.g. in CDs) are over.
That's what QE did. It removed the monopoly position of "savings" as the only source of capital.
Which is OK, since hard-money regimes retard growth and the concomitant expansion of bona-fide wealth creation aka quality of life.
They put the (literal) interest of the "savers" aka rich over consumers aka toiling masses.
Do you understand how a free market works? Interest rates are set by supply and demand. They don't just "go" to 8%, market conditions drive rates either up or down...
Are you implying anything in the last Decade or two has had ANYTHING to do with Freemarkets, or classic economics for that matter?
We're all riding on Janet Yellen, Tim Geithner, Ben Bernanke, Hank Paulson, and Alan Greenspan's seat of their pants as they wing very creative ways to make certain political backers and interests filthy rich. And it has absolutely nothing to do with the fundamentals of economics. So stop being so dishonest.
The days of savings earning money for nothing (e.g. in CDs) are over.
That's what you get for relying on others. Who cares about CDs when you can make 1%/month doing hard money loans at 65% LTV? In fact, you can borrow money at the bank at 2.5%, turn around and lend it for 12% and make 9.5% using OPM.
Come on. It's almost too simple. It has been done for centuries. You don't have to reinvent the wheels. You just have to get off the couch, put a little effort into it, and reap the rewards.
It's not the Fed... It's all the excess cash being hoarded right now.
Who is doing the hoarding?
So it started just a month before it became apparent that Obama was going to win over McCain. The answer is simple get Obama out of office.
"For every complex problem there is an answer that is clear, simple, and wrong"
The days of savings earning money for nothing (e.g. in CDs) are over.
That's what you get for relying on others. Who cares about CDs when you can make 1%/month doing hard money loans at 65% LTV? In fact, you can borrow money at the bank at 2.5%, turn around and lend it for 12% and make 9.5% using OPM.
And if you take back the property, you could end up with a hell of a lot more.
The reports around the last Fed report say, "April." So it's April, right?http://www.bloomberg.com/news/2015-01-07/fed-officials-saw-rate-rise-unlikely-before-april-minutes-show.html
http://en.wikipedia.org/wiki/Leverage_(finance)
I'd like to see the Fed change the rules where banks can only lend double what they have in deposits. What are we up to now? 20 or 30 times assets?
Crazy!
I'll just continue to be befuddled by all the people who manage to max out their 401k, save six months of spending and kids college while buying fancy houses in fancy cities with fancy cars parked in front. All while making less than me! Someone please tell me the secret code!
Yes, based on other statistics the answer must be debt or, as you say, easy credit. I'm not convinced the way to get ahead is to owe someone else your entire net worth.
the way to get ahead is to owe someone else your entire net worth
Inflation can help. The 1970s were an immense gift to anyone who borrowed money in the postwar decades.
But things are a bit far gone now and we're in a different regime:
blue is real (2009 dollars) per-capita (age 25-54) consumer debt
green is real per-capita (age 16+) gov't debt (less Fed-owned)
red is per-capita (age 20-24) student loan debt held by gov't
We're really really fucked.
Fed prints trillions, money collects with banks and the 1%, driving interest rates lower.
Had the Fed actually airdropped* trillions to the masses 2010-now things would be different.
The recovery has been OK, but nothing like the 1990s post-recession expansion:
shows p/t employment has about returned to "full employment" of the Bush Boom but full time positions are still millions short of what full employment looked like in 1998 and 2007.
p/t people clearly don't have the wage negotiating power they did in the 1970s, and the gap in full-time employment means there's a reserve army of millions of unemployed keeping wages down there.
* like from a helicopter
We must open up the ability to conjure money out of thin air.
We must open up the Fed to competition.
Not everyone
I've always contended that rates will continue my lifetimes' trend lower. Why on earth did anybody think they'd reverse course?
don't mean to seem glib over others misfortunes, but can't help to think of all those who bought in 2013/2014, with escalation clauses and bidding wars, along with high rates compared to today...agents had a field day the past two years and made a killing.
I thought the FED couldn't control interest rates... Everyone said we'd be at 8% by now a few years ago.