I guess bloggers scream by blogging in UPPER CASE.
I'm posting this because it might be more effective than just writing or calling my Congress people.
I'm a former Republican activist who is burned out on politics. I would LIKE to have a stable country for the rest of my life, and the same for my descendants. That does NOT appear to be possible now.
You people in Washington DC who are running this country (into the ground), PLEASE do something in the interest of the country for a change!
If we need higher tax rates to balance the budget, I don't mind paying. But I don't want connected people exploiting our system and passing the tax burden over to me. I hear Republicans saying we shouldn't raise taxes on the people creating jobs. REALLY - who is creating jobs these days? If there ARE any, they should be getting tax BREAKS. But come on - the Bush tax cuts didn't create jobs OR incentives to create jobs.
As it is, if anyone wants to create a job for an American, they have to PAY EXTRA taxes and hire accountants and legal experts to navigate all the government red tape. Don't talk about payroll tax holidays - you should get rid of all these job-killing taxes and regulations PERMANENTLY.
I didn't vote Republican to lower taxes, I voted Republican because I want ADULTS running the government. That means a responsible budget and limited government. I realize we have a lot of debt and government services that are non-sustainable. I want those services cut, and I want taxes raised, and I want companies to have incentives to expand and hire AMERICANS. If that means sacrifice for all then that's the way it has to be.
I realize this doesn't fit in either party's nice little policy box, but I believe I'm not alone. In the future I will only vote for responsible ADULTS. I hope you will all grow up before I have to vote again.
Friday, July 29, 2011
Friday, June 10, 2011
What's going on with interest rates?
I'm an amateur economist and investor with a lot of questions. Here's one: What on Earth is happening with interest rates? Why is the bond market driving US Treasury rates lower when the Federal Reserve is about to stop buying Treasury notes at the end of this month? Wouldn't that dry up the money supply and force rates UP?
This is challenging my long-held view that US economic policy has been reckless and hyper-inflationary. Is it possible that Ben Bernanke is right and without Quantitative Easing we would be in a deflationary spiral? I know (and you know) that Bernanke knows a lot more about economics than most people, but come on - isn't there something nefarious going on inside that Federal building?
I am reminded that inflation is an oversimplification of a lot of different monetary forces at work. There's a lot of difference between food inflation and rising home prices. Rising prices of energy can suppress economic activity and reduce demand for all sorts of other things, and the net effect could be "no inflation". And how it affects you may be totally different than how it affects me.
So let's focus on what those Federal Reserve bankers care about. Remember this - when you can't understand something, look for a profit motive. Most of the big banks are in trouble with the real estate market and stand to lose a lot of money and maybe collapse if their real estate loans aren't collateralized. So one thing they will never do while they can stop it, is allow real estate prices nationwide to continue to spiral downward.
All that QE managed to do was to slow down the house price declines and drive up prices for a lot of other stuff (including stock prices). Now that QE looks like it's completely out of favor and the new Tea Party mandate will probably suppress another round of easing, we SHOULD be seeing long-term rates (eg. mortgage rates) climbing and asset price declines accelerating. Right?
Well, all that could happen tomorrow, or not. But I have to consider that Mr. Market (who consistently proves to be smarter than even the likes of Mr. Bernanke) may be telling us that economic weakness and deflation is a real possibility. I also have to think that there are more and more of you who would like to pay less for pizza and rent, and less of you that care about your shrinking or non-existent home equity and 401Ks. Well you probably won't like the next few years anyway - house prices will continue to decline and food prices will continue to rise because of all that foolish economic policy in the past. Until the home/hamburger ratio returns to what it was before the Keynesian Economists went wild, and until average people can afford average homes without fraudulent loans at artificially low rates. That could be a long time from now.
This is challenging my long-held view that US economic policy has been reckless and hyper-inflationary. Is it possible that Ben Bernanke is right and without Quantitative Easing we would be in a deflationary spiral? I know (and you know) that Bernanke knows a lot more about economics than most people, but come on - isn't there something nefarious going on inside that Federal building?
I am reminded that inflation is an oversimplification of a lot of different monetary forces at work. There's a lot of difference between food inflation and rising home prices. Rising prices of energy can suppress economic activity and reduce demand for all sorts of other things, and the net effect could be "no inflation". And how it affects you may be totally different than how it affects me.
So let's focus on what those Federal Reserve bankers care about. Remember this - when you can't understand something, look for a profit motive. Most of the big banks are in trouble with the real estate market and stand to lose a lot of money and maybe collapse if their real estate loans aren't collateralized. So one thing they will never do while they can stop it, is allow real estate prices nationwide to continue to spiral downward.
All that QE managed to do was to slow down the house price declines and drive up prices for a lot of other stuff (including stock prices). Now that QE looks like it's completely out of favor and the new Tea Party mandate will probably suppress another round of easing, we SHOULD be seeing long-term rates (eg. mortgage rates) climbing and asset price declines accelerating. Right?
Well, all that could happen tomorrow, or not. But I have to consider that Mr. Market (who consistently proves to be smarter than even the likes of Mr. Bernanke) may be telling us that economic weakness and deflation is a real possibility. I also have to think that there are more and more of you who would like to pay less for pizza and rent, and less of you that care about your shrinking or non-existent home equity and 401Ks. Well you probably won't like the next few years anyway - house prices will continue to decline and food prices will continue to rise because of all that foolish economic policy in the past. Until the home/hamburger ratio returns to what it was before the Keynesian Economists went wild, and until average people can afford average homes without fraudulent loans at artificially low rates. That could be a long time from now.
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