By keeping interest rates artificially low, the federal government can keep spending (to win elections) without paying much interest. By printing money, the government can pay for some of it – but because there are more greenbacks out there, it reduces the value of the dollar – bad news for all of us.
Low interest rates are good news for people who have money – they can borrow low and invest it for higher rates of return. But they are bad news for people with little money who can’t get any return on their savings. These low interest rates are making the income gap worse.
Until us Americans can vote for cutting spending – even for things we get, the bomb will continue to tick. It’s unsustainable. Someone is going to pay. Lots of someones.
Do you care?
Larry, I remember that time in New York. It was a wonderful trip. My wife and I still talk about it. Keep up the good work. I read your “Think Daily” every morning to start my day!
Of course we care. Larry, if your business is doing well, but you still have debt, pay off your debt, because your lender is charging you more than you could get by investing that money in interest bearing accounts. Just think, if your business is returning 8%, where can you get that rate of return in interest bearing investments?
Larry, you should read about how The Fed has accommodated politicians for the last 100 years by providing the money needed for all the politicians’ grand schemes. The business expansion of the last 40 years was built on credit (borrowing); not saving and investment in real assets. When there are more dollars available to lend and borrow, the dollar decreases in value and the illusion of wealth creation is presented. Did you know that 1 dollar today would only buy 3 cents in 1913; the year the income tax was passed into law and the Federal reserve was formed?
If one wants to preserve ones’ wealth, one should buy some gold/silver, some real estate, and create an income producing business. Playing the stock market, the futures market, buying penny stocks, listening to MSNBC; all guaranteed losers, because speculation is a psychological game based on “the Greater Fool theory.”
I just wish people would spend the same amount of time to educate themselves on issues that affect their lives as they do watching reality TV.
Yes. I care. I care very much and am trying to educate some allegedly brilliant friends and relatives on the need to change our National stance.
Your message helps.
I care very much. Because I have 30-something daughters. Those daughters and their husbands will have a much more difficult time providing their families with a secure future. I care because I have grandchildren, and I want them to grow up in freedom and live an American lifestyle, choosing what is best for them, not living as vassals of the State.
This is a wake up call. America, pay attention to what is happening here, and what it means the next generations.
By the way, I believe that my parents’ generation would have never allowed this – and for that I am both grateful and chastened.