Federal reserve vice chairman says low interest rates will be bad for US economy

[nicoleivy5]

Federal reserve vice chairman says low interest rates will be bad for US economy
"Federal Vice Chairman Stanley Fischer says America's economy could be sluggish for a very long time. Low interest rates are partly to blame, he believes.

"To the extent that low long-term interest rates tell us that the outlook for economic growth is poor, all of us should be very concerned," Fischer said Monday at the Economic Club of New York."

 

[Toddsterpatriot]

The market determines long term rates.

 

[nicoleivy5]

The market determines long term rates.

Agreed with that statement!

 

[BuckToothMoron]

The market determines long term rates.

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

 

[Toddsterpatriot]

The market determines long term rates.

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

 

[eflatminor]

History is replete with examples, central price controls do not work. This is true whether it's the Federal Reserve controlling the price of money or the Soviet Union controlling the price of grain...or toilet paper.

In the 130 years or so before the Fed, inflation was right around zero. Goods and services in demand saw prices increase, others saw prices fall...overall, about flat. Since the Fed in 1913, inflation is up over 2500%.

Inflation, the most regressive tax of them all.

End the Fed.

 

[Toddsterpatriot]

History is replete with examples, central price controls do not work. This is true whether it's the Federal Reserve controlling the price of money or the Soviet Union controlling the price of grain...or toilet paper.

In the 130 years or so before the Fed, inflation was right around zero. Goods and services in demand saw prices increase, others saw prices fall...overall, about flat. Since the Fed in 1913, inflation is up over 2500%.

Inflation, the most regressive tax of them all.

End the Fed.

In the 130 years or so before the Fed, inflation was right around zero.

No it wasn't.

 

[CrusaderFrank]

The market determines long term rates.

..eventually

 

[eflatminor]

History is replete with examples, central price controls do not work. This is true whether it's the Federal Reserve controlling the price of money or the Soviet Union controlling the price of grain...or toilet paper.

In the 130 years or so before the Fed, inflation was right around zero. Goods and services in demand saw prices increase, others saw prices fall...overall, about flat. Since the Fed in 1913, inflation is up over 2500%.

Inflation, the most regressive tax of them all.

End the Fed.

In the 130 years or so before the Fed, inflation was right around zero.

No it wasn't.

That would be counter to my understanding. Please, enlighten me. Link?

 

[Toddsterpatriot]

History is replete with examples, central price controls do not work. This is true whether it's the Federal Reserve controlling the price of money or the Soviet Union controlling the price of grain...or toilet paper.

In the 130 years or so before the Fed, inflation was right around zero. Goods and services in demand saw prices increase, others saw prices fall...overall, about flat. Since the Fed in 1913, inflation is up over 2500%.

Inflation, the most regressive tax of them all.

End the Fed.

In the 130 years or so before the Fed, inflation was right around zero.

No it wasn't.

That would be counter to my understanding. Please, enlighten me. Link?

Your understanding was that prices were flat every year between 1783-1913? Seriously?
If prices drop 10% this year and rise 11.11% next year, would you consider that 0% inflation?

 

[eflatminor]

History is replete with examples, central price controls do not work. This is true whether it's the Federal Reserve controlling the price of money or the Soviet Union controlling the price of grain...or toilet paper.

In the 130 years or so before the Fed, inflation was right around zero. Goods and services in demand saw prices increase, others saw prices fall...overall, about flat. Since the Fed in 1913, inflation is up over 2500%.

Inflation, the most regressive tax of them all.

End the Fed.

In the 130 years or so before the Fed, inflation was right around zero.

No it wasn't.

That would be counter to my understanding. Please, enlighten me. Link?

Your understanding was that prices were flat every year between 1783-1913? Seriously?
If prices drop 10% this year and rise 11.11% next year, would you consider that 0% inflation?

Ah, perhaps I wasn't clear. Allow me to restate: When looked at OVER TIME, from the founding of the country until the formation of the Fed in 1913, the AVERAGE rate of inflation was zero. Sometimes up, sometimes down, overall flat. Stated differently, a widget that cost a dollar in 1790 cost about a dollar in 1912.

Since the Fed, up about 2500%. So, a widget that cost a dollar in 1913 cost about $25 today. It's even worse if you include the prices in markets not considered in the official inflation index, like food and energy prices.

Again, the most regressive tax of the all. Meaning, it's poor people the take the brunt of the Fed's inflation.

 

[Toddsterpatriot]

History is replete with examples, central price controls do not work. This is true whether it's the Federal Reserve controlling the price of money or the Soviet Union controlling the price of grain...or toilet paper.

In the 130 years or so before the Fed, inflation was right around zero. Goods and services in demand saw prices increase, others saw prices fall...overall, about flat. Since the Fed in 1913, inflation is up over 2500%.

Inflation, the most regressive tax of them all.

End the Fed.

In the 130 years or so before the Fed, inflation was right around zero.

No it wasn't.

That would be counter to my understanding. Please, enlighten me. Link?

Your understanding was that prices were flat every year between 1783-1913? Seriously?
If prices drop 10% this year and rise 11.11% next year, would you consider that 0% inflation?

Ah, perhaps I wasn't clear. Allow me to restate: When looked at OVER TIME, from the founding of the country until the formation of the Fed in 1913, the AVERAGE rate of inflation was zero. Sometimes up, sometimes down, overall flat. Stated differently, a widget that cost a dollar in 1790 cost about a dollar in 1912.

Since the Fed, up about 2500%. So, a widget that cost a dollar in 1913 cost about $25 today. It's even worse if you include the prices in markets not considered in the official inflation index, like food and energy prices.

Again, the most regressive tax of the all. Meaning, it's poor people the take the brunt of the Fed's inflation.

from the founding of the country until the formation of the Fed in 1913, the AVERAGE rate of inflation was zero.

Before the Fed, price spikes and bouts of deflation. Prices were not stable.

So, a widget that cost a dollar in 1913 cost about $25 today.

Yes, holding cash for a long time is a money loser. So don't.

It's even worse if you include the prices in markets not considered in the official inflation index, like food and energy prices.

Food and energy are, and always have been, included in official inflation indexes.

 

[BuckToothMoron]

The market determines long term rates.

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

 

[Toddsterpatriot]

The market determines long term rates.

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

I am guessing you don't do a lot of investing, or at least do your own investing.

I do lots of investing.

That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing,

What damage have they done?

Read this short article and it will clear up the confusion you are having.

What confusion do you feel I'm having? Be specific.

Even as recently as 2007, banks were paying 4% interest.

Yes. And?

We have the Federal Reserve’s manipulation of the bond market to blame for this change.

No we don't. Weak growth and low inflation is the cause. Banks aren't lending because of increased capital requirements. Low demand for new loans means lower rates on deposits.

 

[BuckToothMoron]

The market determines long term rates.

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

I am guessing you don't do a lot of investing, or at least do your own investing.

I do lots of investing.

That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing,

What damage have they done?

Read this short article and it will clear up the confusion you are having.

What confusion do you feel I'm having? Be specific.

Even as recently as 2007, banks were paying 4% interest.

Yes. And?

We have the Federal Reserve’s manipulation of the bond market to blame for this change.

No we don't. Weak growth and low inflation is the cause. Banks aren't lending because of increased capital requirements. Low demand for new loans means lower rates on deposits.

Ok, believe what you want. How you can think the money printing the Fed has been doing has had no effect on interest rates is silly. Increase the supply of money and the cost of money goes down, Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates, because she believes she can and has.

http://www.investors.com/politics/commentary/how-central-banks-cause-financial-crises/

The leaders of the world's largest central banks don't seem overly alarmed by the risks that unconventional monetary policy poses.

Janet Yellen, in a speech at the Economic Club of New York in March, assured investors that the Fed could, if necessary, "put additional downward pressure on long-term interest rates and so support the economy" by using "forward guidance about the future path of the federal funds rate and increases in the size or duration of our holdings of long-term securities."

I gotta ask, are you fully invested in this stock market, have you been buying bonds over the last 10 years? If so, you have done well. The question is will you know when to sell those bonds and those high flying stocks.

 

[Toddsterpatriot]

The market determines long term rates.

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

I am guessing you don't do a lot of investing, or at least do your own investing.

I do lots of investing.

That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing,

What damage have they done?

Read this short article and it will clear up the confusion you are having.

What confusion do you feel I'm having? Be specific.

Even as recently as 2007, banks were paying 4% interest.

Yes. And?

We have the Federal Reserve’s manipulation of the bond market to blame for this change.

No we don't. Weak growth and low inflation is the cause. Banks aren't lending because of increased capital requirements. Low demand for new loans means lower rates on deposits.

Ok, believe what you want. How you can think the money printing the Fed has been doing has had no effect on interest rates is silly. Increase the supply of money and the cost of money goes down, Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates, because she believes she can and has.

How Central Banks Cause Financial Crises

The leaders of the world's largest central banks don't seem overly alarmed by the risks that unconventional monetary policy poses.

Janet Yellen, in a speech at the Economic Club of New York in March, assured investors that the Fed could, if necessary, "put additional downward pressure on long-term interest rates and so support the economy" by using "forward guidance about the future path of the federal funds rate and increases in the size or duration of our holdings of long-term securities."

I gotta ask, are you fully invested in this stock market, have you been buying bonds over the last 10 years? If so, you have done well. The question is will you know when to sell those bonds and those high flying stocks.

Ok, believe what you want.

I just want you to back up your claims.

How you can think the money printing the Fed has been doing has had no effect on interest rates is silly.

What effect did it have? What did rates do when they stopped printing?

Increase the supply of money and the cost of money goes down, Econ 101.

I thought printing too much money caused inflation and rising rates? Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates,

Influence? Sometimes. Control? Not so much.

are you fully invested in this stock market,

Pretty much.

The question is will you know when to sell those bonds and those high flying stocks.

Slowly, in retirement.

 

[BuckToothMoron]

The market only controls long term rates when Faith is lost in the Fed. The Fed has held rates low for years now trying to induce an anemic economy, and eventually they will lose control of the bond market because money printing never works.

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

I am guessing you don't do a lot of investing, or at least do your own investing.

I do lots of investing.

That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing,

What damage have they done?

Read this short article and it will clear up the confusion you are having.

What confusion do you feel I'm having? Be specific.

Even as recently as 2007, banks were paying 4% interest.

Yes. And?

We have the Federal Reserve’s manipulation of the bond market to blame for this change.

No we don't. Weak growth and low inflation is the cause. Banks aren't lending because of increased capital requirements. Low demand for new loans means lower rates on deposits.

Ok, believe what you want. How you can think the money printing the Fed has been doing has had no effect on interest rates is silly. Increase the supply of money and the cost of money goes down, Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates, because she believes she can and has.

How Central Banks Cause Financial Crises

The leaders of the world's largest central banks don't seem overly alarmed by the risks that unconventional monetary policy poses.

Janet Yellen, in a speech at the Economic Club of New York in March, assured investors that the Fed could, if necessary, "put additional downward pressure on long-term interest rates and so support the economy" by using "forward guidance about the future path of the federal funds rate and increases in the size or duration of our holdings of long-term securities."

I gotta ask, are you fully invested in this stock market, have you been buying bonds over the last 10 years? If so, you have done well. The question is will you know when to sell those bonds and those high flying stocks.

Ok, believe what you want.

I just want you to back up your claims.

How you can think the money printing the Fed has been doing has had no effect on interest rates is silly.

What effect did it have? What did rates do when they stopped printing?

Increase the supply of money and the cost of money goes down, Econ 101.

I thought printing too much money caused inflation and rising rates? Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates,

Influence? Sometimes. Control? Not so much.

are you fully invested in this stock market,

Pretty much.

The question is will you know when to sell those bonds and those high flying stocks.

Slowly, in retirement.

Interest rates are artificially low because of the Fed, the stock market is near all time highs because there is no other place to get a reasonable return (TINA), the bond market has become an exercise in the greater fool theory, that being "I willl buy this bond now and hope rates go down and a bigger fool will buy it from me". Stocks are poised to fall back when the market sentiment inevitable changes, and investors realize the valuations are too high in a slow/no growth environment. When this will happen is anybodies guess, but the longer it takes, the more violent it will be. All this is caused by a hubris central bank that believes they can avoid natural downturns thru monetary policy.

The Fed is robbing savers by not raising rates. It makes it impossible for them to get a reasonable return on their money. Those in retirement are hurt the worst.

"I thought printing too much money caused inflation and rising rates? Econ 101."

Printing money will cause inflation. That is why stocks, real estate and bonds are so expensive, read bubbles. Printing money does NOT raise rates. You really don't think that excessive supply leads to higher cost, do you?

Next, that “injection” of $2 trillion of new money meant that there was a lot of money sloshing around in the financial markets. Some of that new money was invested in bonds, which pushed up the price of those bonds. When bond prices rise, their yields (or the interest rate the bonds pay) fall. Therefore, the creation of paper money by the Fed pushed interest rates lower. Consequently, the cost of mortgages, car loans and other consumer credit all fell. Lower mortgage rates kept home prices from dropping even further than they have; and lower interest rates on consumer credit supported consumer spending (and therefore the GDP).

You might want to read what some very big and successful investors are saying.
These three investing legends are warning of another crash

I hope you have at least some hedge in place against a falling market. Hey, it's your money, do what you want, but every investor is a genius in a market moving up.

Read Marc Faber, Bill Fleckenstein and Fred Hickey if you want a perspective from somebody other than your stock broker.

Good luck, I hope your retirement nest egg is protected.

 

[Toddsterpatriot]

The market only controls long term rates when Faith is lost in the Fed.

Faith or no faith, the Fed doesn't control long term rates.

The Fed has held rates low for years now trying to induce an anemic economy

Yes, overnight rates are very low.

eventually they will lose control of the bond market

They don't have control of the bond market. What will happen when they "lose control"?

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

I am guessing you don't do a lot of investing, or at least do your own investing.

I do lots of investing.

That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing,

What damage have they done?

Read this short article and it will clear up the confusion you are having.

What confusion do you feel I'm having? Be specific.

Even as recently as 2007, banks were paying 4% interest.

Yes. And?

We have the Federal Reserve’s manipulation of the bond market to blame for this change.

No we don't. Weak growth and low inflation is the cause. Banks aren't lending because of increased capital requirements. Low demand for new loans means lower rates on deposits.

Ok, believe what you want. How you can think the money printing the Fed has been doing has had no effect on interest rates is silly. Increase the supply of money and the cost of money goes down, Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates, because she believes she can and has.

How Central Banks Cause Financial Crises

The leaders of the world's largest central banks don't seem overly alarmed by the risks that unconventional monetary policy poses.

Janet Yellen, in a speech at the Economic Club of New York in March, assured investors that the Fed could, if necessary, "put additional downward pressure on long-term interest rates and so support the economy" by using "forward guidance about the future path of the federal funds rate and increases in the size or duration of our holdings of long-term securities."

I gotta ask, are you fully invested in this stock market, have you been buying bonds over the last 10 years? If so, you have done well. The question is will you know when to sell those bonds and those high flying stocks.

Ok, believe what you want.

I just want you to back up your claims.

How you can think the money printing the Fed has been doing has had no effect on interest rates is silly.

What effect did it have? What did rates do when they stopped printing?

Increase the supply of money and the cost of money goes down, Econ 101.

I thought printing too much money caused inflation and rising rates? Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates,

Influence? Sometimes. Control? Not so much.

are you fully invested in this stock market,

Pretty much.

The question is will you know when to sell those bonds and those high flying stocks.

Slowly, in retirement.

Interest rates are artificially low because of the Fed, the stock market is near all time highs because there is no other place to get a reasonable return (TINA), the bond market has become an exercise in the greater fool theory, that being "I willl buy this bond now and hope rates go down and a bigger fool will buy it from me". Stocks are poised to fall back when the market sentiment inevitable changes, and investors realize the valuations are too high in a slow/no growth environment. When this will happen is anybodies guess, but the longer it takes, the more violent it will be. All this is caused by a hubris central bank that believes they can avoid natural downturns thru monetary policy.

The Fed is robbing savers by not raising rates. It makes it impossible for them to get a reasonable return on their money. Those in retirement are hurt the worst.

"I thought printing too much money caused inflation and rising rates? Econ 101."

Printing money will cause inflation. That is why stocks, real estate and bonds are so expensive, read bubbles. Printing money does NOT raise rates. You really don't think that excessive supply leads to higher cost, do you?

Next, that “injection” of $2 trillion of new money meant that there was a lot of money sloshing around in the financial markets. Some of that new money was invested in bonds, which pushed up the price of those bonds. When bond prices rise, their yields (or the interest rate the bonds pay) fall. Therefore, the creation of paper money by the Fed pushed interest rates lower. Consequently, the cost of mortgages, car loans and other consumer credit all fell. Lower mortgage rates kept home prices from dropping even further than they have; and lower interest rates on consumer credit supported consumer spending (and therefore the GDP).

You might want to read what some very big and successful investors are saying.
These three investing legends are warning of another crash

I hope you have at least some hedge in place against a falling market. Hey, it's your money, do what you want, but every investor is a genius in a market moving up.

Read Marc Faber, Bill Fleckenstein and Fred Hickey if you want a perspective from somebody other than your stock broker.

Good luck, I hope your retirement nest egg is protected.

Interest rates are artificially low because of the Fed

Which ones?

Printing money will cause inflation. That is why stocks, real estate and bonds are so expensive

Inflation makes bonds go down. Are they going down?

Printing money does NOT raise rates.

Look at Venezuela and Zimbabwe. They print, they have inflation and high rates.
We have neither.

All this is caused by a hubris central bank that believes they can avoid natural downturns thru monetary policy.

Who at the Fed believes they can avoid downturns? I think they're pretty clear that their powers are limited.

The Fed is robbing savers by not raising rates.

Nobody is borrowing, everyone wants to be in cash, how high should rates be?
If the Fed let overnight rates float, do you think they'd increase? How much? Why?

Next, that “injection” of $2 trillion of new money meant that there was a lot of money sloshing around in the financial markets. Some of that new money was invested in bonds, which pushed up the price of those bonds. When bond prices rise, their yields (or the interest rate the bonds pay) fall.

And when they stopped printing, what did yields do?

Consequently, the cost of mortgages, car loans and other consumer credit all fell.

So people who had mortgages and other loans, saved money.
Thanks Fed.

 

[BuckToothMoron]

I am guessing you don't do a lot of investing, or at least do your own investing. That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing, or more appropriately, their increase of money supply thru phantom money saving.

Read this short article and it will clear up the confusion you are having.

How Does The Fed Control Interest Rates In A Free Market?
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.

I am guessing you don't do a lot of investing, or at least do your own investing.

I do lots of investing.

That's ok, most people don't, and thus they don't understand the damage the Fed has done with their massive money printing,

What damage have they done?

Read this short article and it will clear up the confusion you are having.

What confusion do you feel I'm having? Be specific.

Even as recently as 2007, banks were paying 4% interest.

Yes. And?

We have the Federal Reserve’s manipulation of the bond market to blame for this change.

No we don't. Weak growth and low inflation is the cause. Banks aren't lending because of increased capital requirements. Low demand for new loans means lower rates on deposits.

Ok, believe what you want. How you can think the money printing the Fed has been doing has had no effect on interest rates is silly. Increase the supply of money and the cost of money goes down, Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates, because she believes she can and has.

How Central Banks Cause Financial Crises

The leaders of the world's largest central banks don't seem overly alarmed by the risks that unconventional monetary policy poses.

Janet Yellen, in a speech at the Economic Club of New York in March, assured investors that the Fed could, if necessary, "put additional downward pressure on long-term interest rates and so support the economy" by using "forward guidance about the future path of the federal funds rate and increases in the size or duration of our holdings of long-term securities."

I gotta ask, are you fully invested in this stock market, have you been buying bonds over the last 10 years? If so, you have done well. The question is will you know when to sell those bonds and those high flying stocks.

Ok, believe what you want.

I just want you to back up your claims.

How you can think the money printing the Fed has been doing has had no effect on interest rates is silly.

What effect did it have? What did rates do when they stopped printing?

Increase the supply of money and the cost of money goes down, Econ 101.

I thought printing too much money caused inflation and rising rates? Econ 101.

Maybe you should let Janet Yellen know she can't influence long term rates,

Influence? Sometimes. Control? Not so much.

are you fully invested in this stock market,

Pretty much.

The question is will you know when to sell those bonds and those high flying stocks.

Slowly, in retirement.

Interest rates are artificially low because of the Fed, the stock market is near all time highs because there is no other place to get a reasonable return (TINA), the bond market has become an exercise in the greater fool theory, that being "I willl buy this bond now and hope rates go down and a bigger fool will buy it from me". Stocks are poised to fall back when the market sentiment inevitable changes, and investors realize the valuations are too high in a slow/no growth environment. When this will happen is anybodies guess, but the longer it takes, the more violent it will be. All this is caused by a hubris central bank that believes they can avoid natural downturns thru monetary policy.

The Fed is robbing savers by not raising rates. It makes it impossible for them to get a reasonable return on their money. Those in retirement are hurt the worst.

"I thought printing too much money caused inflation and rising rates? Econ 101."

Printing money will cause inflation. That is why stocks, real estate and bonds are so expensive, read bubbles. Printing money does NOT raise rates. You really don't think that excessive supply leads to higher cost, do you?

Next, that “injection” of $2 trillion of new money meant that there was a lot of money sloshing around in the financial markets. Some of that new money was invested in bonds, which pushed up the price of those bonds. When bond prices rise, their yields (or the interest rate the bonds pay) fall. Therefore, the creation of paper money by the Fed pushed interest rates lower. Consequently, the cost of mortgages, car loans and other consumer credit all fell. Lower mortgage rates kept home prices from dropping even further than they have; and lower interest rates on consumer credit supported consumer spending (and therefore the GDP).

You might want to read what some very big and successful investors are saying.
These three investing legends are warning of another crash

I hope you have at least some hedge in place against a falling market. Hey, it's your money, do what you want, but every investor is a genius in a market moving up.

Read Marc Faber, Bill Fleckenstein and Fred Hickey if you want a perspective from somebody other than your stock broker.

Good luck, I hope your retirement nest egg is protected.

Interest rates are artificially low because of the Fed

Which ones?

Printing money will cause inflation. That is why stocks, real estate and bonds are so expensive

Inflation makes bonds go down. Are they going down?

Printing money does NOT raise rates.

Look at Venezuela and Zimbabwe. They print, they have inflation and high rates.
We have neither.

All this is caused by a hubris central bank that believes they can avoid natural downturns thru monetary policy.

Who at the Fed believes they can avoid downturns? I think they're pretty clear that their powers are limited.

The Fed is robbing savers by not raising rates.

Nobody is borrowing, everyone wants to be in cash, how high should rates be?
If the Fed let overnight rates float, do you think they'd increase? How much? Why?

Next, that “injection” of $2 trillion of new money meant that there was a lot of money sloshing around in the financial markets. Some of that new money was invested in bonds, which pushed up the price of those bonds. When bond prices rise, their yields (or the interest rate the bonds pay) fall.

And when they stopped printing, what did yields do?

Consequently, the cost of mortgages, car loans and other consumer credit all fell.

So people who had mortgages and other loans, saved money.
Thanks Fed.

Which rates? Better question is which aren't. Feds buy treasuries which drives price up/rates down. It ripples thru to all interest bearing products save credit card debt. Certainly mortgage rates, nearly all bond rates, stocks paying dividends go up as investors chase returns.

Inflation makes bonds go down is not absolute. The inflation we have is not in the typical CPI measurement. It is asset inflation, stocks, bonds, real estate. Why in an economy that has been anemic for the last 8 years, meaning no substantial growth, are asset prices going up? Wages have not increased, unemployment is a problem for middle income people. Too many part timers making less. If you are relying on the CNBC Jim Crammers of the world, you will never get the pertinent facts. Those folks want to paint a rosy picture. They have "experts" from investment banks tell you everything is fine. Did you hear about the credit bubble in 2007 from these clowns? Nope! They report, they don't tell you when it's coming.

Third world countries (Venezuela, Zimbabwe) with a fiat currency not supported by the largest economy in the world is not a good analogy to what is occurring in the US. The US dollar is the reserve currency for the world, everything is denominated in US dollars. And you can sit and believe we don't have inflation because it makes you seem rich when you are holding the assets (stocks, bonds, real estate) which are inflated. Ask yourself why IBM hasn't seen top line growth in over 4 years, ask yourself why companies BORROW cheap money to buy back their own stock, but won't invest in hiring more people, building plants or infrastructure. They want their stock price high, and have determined that they are better borrowing money to reduce the float and artificially inflate the stock price.

The Fed is not clear about anything. They have been promising interest rate hikes for 2 years, and all they have managed is one 1/4 point. Did you happen to see how the stock market reacted the next quarter?

Saying nobody is borrowing is absurd. People are borrowing, real estate prices are high because of borrowing at low rates. Apple has tons of cash, but money is so cheap they borrow to pay dividends and buy their own stock. Seriously? Nobody is borrowing. Where do you get this shit?

U.S. warns of rising car loan risk

The explosion of auto lending may be starting to hit the skids.
A top banking regulator warned that the $1 trillion car loan industry has gotten more dangerous. The Office of the Comptroller of the Currency cited "unprecedented" growth in auto loans, rising delinquencies and shrinking used car values.


The banking watchdog also pointed to cutthroat competition among banks, which has led them to relax underwriting standards.

You go ahead and thank the Fed for your great stock portfolio and all the appreciation in your real estate, I just wonder who you'll blame when your stocks start bleeding and your real estate loans go upside down. Too much CNBC is a bad thing brother.

 

[EdwardBaiamonte]

I just wonder who you'll blame when your stocks start bleeding and your real estate loans go upside down. Too much CNBC is a bad thing brother.

why would stocks and real estate go down when Fed will probably prevent it?????