[ARCHIVED THREAD] - Federal Reserve is losing the ability to control interest rates - per Phil Gramm (Page 1 of 2)
Posted: 1/2/2019 4:05:58 PM EDT
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Interesting perspective from Phil Graham. Basically the Fed is sticking the current economy with bills from the Obama days. The Fed bought bonds under the "quantitative easing" program during the Obama administration. Now the Fed is raising interest rates, while simultaneously flooding the market with those bonds at lower prices. The only reason the bonds are worth less is because the Fed is raising interest rates. https://www.cnbc.com/2019/01/02/the-fed-is-losing-its-ability-to-control-interest-rates-former-senate-banking-chief-says.html |
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Keeping rates at nearly 0% during Obama's ENTIRE presidency was criminal. People should be tried. They 100% want Trump to be the fall guy when it's time to atone for the financial sins of the past. |
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There's a reason every Fed Chair from Greenspan on has said the same thing over and over to .gov: 'YOU HAVE TO GET YOUR DEBT UNDER CONTROL' you can't keep printing money to pay for debt without either removing the value of the dollar or raising rates. |
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This is the basic truth. None of the financial shenanigans would be necessary if congress didn't spend like a drunken sailor. Quoted:
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There's a reason every Fed Chair from Greenspan on has said the same thing over and over to .gov: 'YOU HAVE TO GET YOUR DEBT UNDER CONTROL' you can't keep printing money to pay for debt without either removing the value of the dollar or raising rates. Congress? Not so much. |
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The Fed doesn't control interest rates.
The Fed can charge banks more interest on loans taken to meet reserve requirement. The banks have $1.6 T in excess reserves on deposit with the Fed. No major bank is borrowing to meet reserve requirements. The Fed has "raised interest rates" because the banks which own it want to raise their rates. The Fed is nothing more than providing cover for those banks to fool the uninformed ... with the help of the media. |
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The Fed lost the ability to control interest rates under Obama because they were practically 0 to help fix the last recession. Now that things have gotten better they are moving back to normal. There is no grand conspiracy against Trump. |
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Quoted: The Fed lost the ability to control interest rates under Obama because they were practically 0 to help fix the last recession. Now that things have gotten better they are moving back to normal. There is no grand conspiracy against Trump. Regardless, I'm sure they are just devistated that Trump is the one who is going to be blamed for the negative repercussions of a return to sanitym |
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The Fed doesn't control interest rates. The Fed can charge banks more interest on loans taken to meet reserve requirement. The banks have $1.6 T in excess reserves on deposit with the Fed. No major bank is borrowing to meet reserve requirements. The Fed has "raised interest rates" because the banks which own it want to raise their rates. The Fed is nothing more than providing cover for those banks to fool the uninformed ... with the help of the media. |
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Interesting perspective from Phil Graham. Basically the Fed is sticking the current economy with bills from the Obama days. The Fed bought bonds under the "quantitative easing" program during the Obama administration. Now the Fed is raising interest rates, while simultaneously flooding the market with those bonds at lower prices. The only reason the bonds are worth less is because the Fed is raising interest rates. https://www.cnbc.com/2019/01/02/the-fed-is-losing-its-ability-to-control-interest-rates-former-senate-banking-chief-says.html https://www.wsj.com/articles/the-feds-obama-era-hangover-11546374393 As the Trump economic revival doubled economic-growth rates over the last two years, interest rates, which had fallen in the final two years of the Obama era, have risen by more than 40%. Today no news cycle is complete without speculation about how much the Federal Reserve will raise interest rates or how the president has blasted the Fed for setting rates too high. The latest saga played out last month, with the Fed raising rates for the fourth time in 2018 even though market rates were down slightly since the last Fed hike, in September. Extraordinarily, this debate is occurring at the very moment the Fed—shackled by... |
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The last recession ended about ten years ago. Why do you think the Fed waited until Trump was elected to raise rates? Please enlighten us. No, I believe the reason the Fed is raising rates now is they're spooked by something and need to get them back up for a while, so they can lower them later if a calamity happens. They are also concerned with the government deficit in Q4. I'm interested to see where this goes, but I don't believe it has anything to do with Trump. |
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There's a reason every Fed Chair from Greenspan on has said the same thing over and over to .gov: 'YOU HAVE TO GET YOUR DEBT UNDER CONTROL' you can't keep printing money to pay for debt without either removing the value of the dollar or raising rates. 
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The last recession ended about ten years ago. Why do you think the Fed waited until Trump was elected to raise rates? Please enlighten us. I think, more than it being used to make Trump look bad it was low to make Obama look good. They get effect on both sides with this. |
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LOL. The Fed controls interest rates. That's why mortgage interest rates increased recently, for example. 
Please tell us what interest rate the Fed raised recently. Please cite the statute or regulation which empowers the Fed to order banks to raise the rates they charge for loans. If you look past the propaganda you are fed every day you just might learn something. Mortgage rates (and any other rates which have gone up) increased because lenders decided to charge more interest. |
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The last recession ended about ten years ago. Why do you think the Fed waited until Trump was elected to raise rates? Please enlighten us. You take the hit when you are most prosperous and can afford to take it not when you are still struggling. Losing out on the QE was part of the plan. They borrowed against future prosperity to help fix an immediate struggle. |
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To be fair to drunken sailors, they generally stop pissing away money when they run out of it. Congress? Not so much. Quoted:
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There's a reason every Fed Chair from Greenspan on has said the same thing over and over to .gov: 'YOU HAVE TO GET YOUR DEBT UNDER CONTROL' you can't keep printing money to pay for debt without either removing the value of the dollar or raising rates. Congress? Not so much. |
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Nobody in power is in any way interested in getting debt under control. Look at any of the SS threads on this generally conservative board. Politicians will all kick the can down the road until there are no options left and by then it will be too late. DC is a scathing orgy of money and power and corruption. We're on the USS Ronald Reagan headed for a waterfall that we can now see. We ain't turning this pig around before it's too late. |
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I think they were just glad to accommodate Obama for his entire presidency regardless of how unreasonable and unhealthy it was to keep rates so low for so long. Regardless, I'm sure they are just devistated that Trump is the one who is going to be blamed for the negative repercussions of a return to sanitym If their goal was to tank Trump why did they wait so long into his presidency? He might not even be in the White House by the time we really feel the change. This is nothing more than an attempt to move toward a more rational and healthy economy. The closer we get to that the better off we will be when another recession hits because we will have regained some of the tools for smoothing that recession. |
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Quoted: The Fed lost the ability to control interest rates under Obama because they were practically 0 to help fix the last recession. Now that things have gotten better they are moving back to normal. There is no grand conspiracy against Trump. |
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Quoted: This is the basic truth. None of the financial shenanigans would be necessary if congress didn't spend like a drunken sailor.  Greenspan: "The United States can pay any debt it has because we can always print money to do that" Watching Gooldsbee shit his pants in the middle of that clip is kinda funny. |
I miss candidate Trump. 
 Donald Trump - We Are In A Big Fat Ugly Bubble |
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They weren't practically zero, they were actually negative. Quoted:
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The Fed lost the ability to control interest rates under Obama because they were practically 0 to help fix the last recession. Now that things have gotten better they are moving back to normal. There is no grand conspiracy against Trump. Nevermind the impact to inflation if you consider deficit spending as increasing the money supply as well. 
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They still are. Real vs. nominal. Nevermind the impact to inflation if you consider deficit spending as increasing the money supply as well.
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Did you listen to the link you posted?
Said the fed is being political keeping it low for zero and once the next guy steps in the feds will raise interest rates and it will all come crashing down. Seems in line with current events. |
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That's the only weird part, given the scale of the QE I would have bet that there would be much more inflation by now...that's probably a bad thing, or something in the system has changed and we haven't caught on yet. Quoted:
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They still are. Real vs. nominal. Nevermind the impact to inflation if you consider deficit spending as increasing the money supply as well. Attached File |
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Did you listen to the link you posted? Said the fed is being political keeping it low for zero and once the next guy steps in the feds will raise interest rates and it will all come crashing down. Seems in line with current events. Quoted:
Said the fed is being political keeping it low for zero and once the next guy steps in the feds will raise interest rates and it will all come crashing down. Seems in line with current events. Attached File Attached File |
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He called the stock market a bubble. Then went on to claim the ramp up. That is the problem and they will hang him with it. https://www.AR15.Com/media/mediaFiles/200878/DEzj6n3XUAE9tqa_jpg-793934.JPG https://www.AR15.Com/media/mediaFiles/200878/tumblr_pa6i4lbBhs1we4t2no1_640_png-793935.JPG No one can argue that most stocks were/are over valued. The market falling doesn’t mean that wealth is disappearing, just that wealth is being put into other vehicles. Regardless, I’ve got a bunch of food, water, and ammo. |
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That's the only weird part, given the scale of the QE I would have bet that there would be much more inflation by now...that's probably a bad thing, or something in the system has changed and we haven't caught on yet. Quoted:
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They still are. Real vs. nominal. Nevermind the impact to inflation if you consider deficit spending as increasing the money supply as well. Even an increase in the money supply like QE can't offset the massive contraction in credit that occurred since 2008, partly because America worked to pay off debt following the crash and partly because credit restrictions tightened, removing huge portions of the population from the credit pool. 0% interest rates only helped businesses and people with good enough credit to quality, exactly the people that don't need credit. There is a whole school of thought that we have actually been fighting deflation for the past decade due to the contraction in the credit supply. |
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Another goal . Look at the interest payments were going to have . Attached File |
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It never made it to main street. https://www.AR15.Com/media/mediaFiles/200878/SPX_PNG-793931.JPG Quoted:
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They still are. Real vs. nominal. Nevermind the impact to inflation if you consider deficit spending as increasing the money supply as well. https://www.AR15.Com/media/mediaFiles/200878/SPX_PNG-793931.JPG |
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Please tell us what interest rate the Fed raised recently. https://www.cnbc.com/2018/12/19/fed-hikes-rates-by-a-quarter-point-.html |
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Keeping rates at nearly 0% during Obama's ENTIRE presidency was criminal. People should be tried. They 100% want Trump to be the fall guy when it's time to atone for the financial sins of the past. 
Yep, can't have rising wages now can we... That may cause inflation... No one really wants a strong economy... |
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Keeping rates at nearly 0% during Obama's ENTIRE presidency was criminal. People should be tried. They 100% want Trump to be the fall guy when it's time to atone for the financial sins of the past. |
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Quoted:
There's a reason every Fed Chair from Greenspan on has said the same thing over and over to .gov: 'YOU HAVE TO GET YOUR DEBT UNDER CONTROL' you can't keep printing money to pay for debt without either removing the value of the dollar or raising rates. |
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In writing at WSJ: [url=https://www.wsj.com/articles/the-feds-obama-era-hangover-11546374393]By paying banks not to lend, the central bank diminished its ability to control interest rates.[/url]
the Fed—shackled by its bloated asset holdings and the resulting excess reserves of the banking system—has less ability to control interest rates than it has had in its entire 105-year history. When the recovery lagged, the Fed continued its monetary expansion by increasing the assets in its balance sheet to almost five times their prerecession level. By buying Treasurys and mortgage-backed securities, the Fed acquired or offset some 45% of all federal debt issued during the Obama era—about four times the share of federal debt the Fed purchased during World War II. In August 2008, banks held a total of 14 cents of reserves for every dollar of demand deposits outstanding, reflecting a normal reserve ratio in a fractional-reserve banking system. Today, U.S. banks hold $1.31 of reserves for every dollar of demand deposits outstanding. |
