Friday, August 13, 2010

Fed official calls low rates a `dangerous gamble'

Thomas Hoenig one voice of truth in a cadre of liars, read AP story here

Will be offering an extensive update sometime tomorrow, off for beer and bass.

D
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1 comment:

Anonymous said...

I dont know what Hoenig is smoking. Maybe he is the designated dissenter. The point to realise dear Duratek is that the Fed does not control the rates! Thats right. The bond market does. The fed follows the 3 month tbill rate. You want to know when the rates will go up? When the 3month tbill rates goes above 0.25. Thats it. No sooner or later. Once you realise the truth its very liberating! People with large sums of money are willing to deposit money at near zero interest rates. If you have 20 billion us$ in your pocket where would you put it? Banks are FDIC insured for only 250,000. Also when a bank closes it may take weeks for you to get your money back. At this point the Fed cannot raise rates. It just cant. Even the 2yr went below 0.5 at some point. This tells you that the bond market is pricing no rate change for almost 2yrs!
If the Fed were really able to set interest rate at zero then think about it the US government would never have to worry about defaulting! Just borrow at zero and keep rolling the debt. Anyways thats not how it works. In times of speculation like during the housing boom the rates go up why? Because Why buy treasuries when you can double your money in housing right? So Tbill rates go up. The Fed follows. Then the Fed get blamed for "tightening" and causing the bubble to burst. The Fed does no such thing. If the Fed really had control they would want asset prices to keep going up forever.

Now I am not saying the Fed is not to blame for the mess we are in right now. They are. I am just saying people focusing on rates are looking at it from a wrong perspective. The Fed is unconstitutional. Fractional reserve banking is a fraud. Our money system is a fraudulent ponzi scheme backed by the Government. The Fed is the third central bank of the US. What happened to the first two? Unfortunately we do not have anyone with guts like Andrew Jackson. Look up some history. They play the same game in every century and in every country. Nothing is new.

http://globaleconomicanalysis.blogspot.com/2007/02/counterfeiting-money-crime-or-good.html

http://globaleconomicanalysis.blogspot.com/2009/10/fractional-reserve-lending-constitutes.html

Also case against the fed by Rothbard is a good read. Only senator that argues against the current monetary system is Ron Paul who has written a book "End the fed". Unfortunately Americans are too daft to make him president.

1:20 PM

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