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Liberty News ForumLNF Forums HereEconomics, Financial News › Fed Funds Rate, Historical Graph
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Very Hot Topic (More than 25 Replies) Fed Funds Rate, Historical Graph (Read 6,356 times)
petep
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Re: Fed Funds Rate, Historical Graph
Reply #20 - Jan 8th, 2016 at 1:17pm
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when you look at the history of us fed spending, during peaks, there was always an association with some massive investment in infrastructure that one could point to - freeway system, wwii, technology...

we are spending at rates never before seen, going deeper and deeper into debt...and no one can really point to what we have gained, that's an investment...

there is a difference between going into debt because you just bought an asset that provide future cash flows and a good return....vs. going into debt because you are drinking too much and buying new furniture....

none of those shovel ready projects used as a basis and rational for more spending seemed to have come to fruition...all we have is more people on food stamps, more illegals and more problems in the ME

  
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Queshank
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Re: Fed Funds Rate, Historical Graph
Reply #21 - Jan 8th, 2016 at 2:34pm
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Wyatt's the only one giving answering and discussing a real shot, but this is important stuff so I'll try to chip in.  I know how you've all been waiting for my insights.  I can just see you all with bated breath (thanks Shooter!!) 

Rabbit_Reborn wrote on Oct 2nd, 2015 at 12:33pm:
The Fed Funds Rate is coming up on 7 full years at 0%.

A few questions:

1. Why does the Federal Reserve drop the interest rates? What purpose does that serve?


An attempt to loosen the banking industries lending rules.  By giving banks access to more money at no interest, the hope is that it will make them more likely to lend money in the form of small business loans for businesses to continue their lines of credit and hire more and invest more in equipment.

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2. When was the last time the Fed Funds Rate was held at 0% for 1 full year?


Never.

Quote:
3. What lessons can be learned from the current levels of interest rates and the state of economy in the United States?


Not much really beyond that the Fed has limited tools in it's box for spurring the economy.

We are in uncharted waters.  The lessons to learn will be learned 50 years from now.  And they will be argued about then as vociferously as we are still arguing about the Great Depression and the responses and attempts to correct it.

For me ... the bottom line is to simply ignore everyone who thinks they know what they're talking about.  Because nobody has a fricking clue.  That's what I personally have learned.  What major event will happen in the next 10 years that changes the way people think and respond to stimuli?  Nobody knows.  And that is the major driving force behind our economy in my very humble (seriously) opinion.  Random stimuli that changes the way people respond to their environment.

Queshank

  

Morality is doing what is right, regardless of what you are told.

Religion is doing what you are told, regardless of what is right.
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Re: Fed Funds Rate, Historical Graph
Reply #22 - Jan 8th, 2016 at 2:36pm
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Rabbit_Reborn wrote on Oct 2nd, 2015 at 1:38pm:
Retirees account for about half of the drop in labor force.

http://www.usnews.com/news/articles/2014/07/17/baby-boomers-are-a-big-part-of-la...

http://www.factcheck.org/2015/03/declining-labor-participation-rates/

So the Labor Force Participation Rate would still be dropping, even removing all of the recent retirees.


The interesting thing to note is the labor force participation was, and would still be dropping absent the 2007 recession as well.  Everyone's baffled if they're being honest and not trying to sell a book or party line.

I wasn't trying to be antagonistic when I asked TL where 25 to 54 year olds who drop out of the labor force are going.  I was serious.  Research into the area has led to only the following likely answers:

When broken apart on gender it appears women are leaving the workforce to care for children.

Many people in times of downturn return to school for additional training in a new field.

A rise in the disability roles which are generous if you qualify.  The question there being how many 25 year olds are really qualifying for disability.  I haven't dug too deep into this one as to me it seems related more to  the economy which seems to be the catchall for everything not explained by something else anyway.

For myself, I'm 45 and unemployed and really not looking too hard for a job because I don't need to.  Not because of disability or assistance but because my wife beat me in the "let's find a good job" race and now I can take my time and be choosy.  We can afford to live on one income with a second income being all disposable cash.

Maybe people are finally waking up to that.  And given the number of sites out there showing "7 steps to single income prosperity" and "How to live on one income" people are starting to get over the "omg I need to have a job and buy more shit to validate my existence!" mindset and are starting to learn to live reasonably.

Not likely.  Just spitballing.  But that would have an interesting drag on the economy as well ... less consumer spending because less focus on material goods.  It seems to dovetail with the rise of religion at least in my area as well.  A focus on spiritual matters as opposed to material.  I have friends who believe we are in the end times and they will see the Rapture in their life time.  And who believe the United States will fall as it's not mentioned in the Bible.  That kind of thinking was unheard of in my area 20 years ago ... but has slowly been gaining in popularity.  I don't think that mindset should be ignored.

Queshank
« Last Edit: Jan 8th, 2016 at 2:44pm by Queshank »  

Morality is doing what is right, regardless of what you are told.

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petep
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Re: Fed Funds Rate, Historical Graph
Reply #23 - Jan 8th, 2016 at 3:17pm
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good answer up above Q....I especially like your last part...often, most often in fact, we only think in terms of what we know to be true today...we think in evolutionary terms, not revolutionary terms....look at drawings from the late 1800's what life will be like 100 years from now...futurists then basically just extrapolated what they had at their hands at the time...

very few Leonardo da vinci's out there...who knows what invention or external event may radically change things....
  
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Re: Fed Funds Rate, Historical Graph
Reply #24 - Jan 8th, 2016 at 4:05pm
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Queshank wrote on Jan 8th, 2016 at 12:56pm:
Where are they going? 

Queshank

The informal cash economy, back to school, unemployment, mom's basement, military...

Of course this is not a complete list.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Fed Funds Rate, Historical Graph
Reply #25 - Jan 8th, 2016 at 10:49pm
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TowardLiberty wrote on Jan 8th, 2016 at 4:05pm:
The informal cash economy, back to school, unemployment, mom's basement, military...

Of course this is not a complete list.


As I understand it, people in the military are subtracted from the population and not considered in the LFPR. 

It'd be interesting to see studies done of how many people have entered the cash economy.  I wonder how much of it is the drug trade in inner cities.  And I wonder how many of them would become a part of the labor force if some drugs were legalized.

Queshank
  

Morality is doing what is right, regardless of what you are told.

Religion is doing what you are told, regardless of what is right.
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Re: Fed Funds Rate, Historical Graph
Reply #26 - Jan 9th, 2016 at 1:20pm
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Rabbit_Reborn wrote on Jan 8th, 2016 at 10:33am:
Bumping a two month old thread in light of the first interest rate hike in 7 years.

Anything of note happen since the Fed decided this?


I recall some red numbers.  Can't recall where or why.  Cheesy

Quote:
Still, the interest rates are remarkably low historically. Will the hikes continue?


Its really hard to say what these folks are going to do.  I'm not sure they know.  They are stumbling around blindfolded so it will probably depend on what they run into.
  
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Re: Fed Funds Rate, Historical Graph
Reply #27 - Jan 9th, 2016 at 2:58pm
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wyattstorch2004 wrote on Jan 9th, 2016 at 1:20pm:
Its really hard to say what these folks are going to do.  I'm not sure they know.  They are stumbling around blindfolded so it will probably depend on what they run into.


I love this.  Well stated almost to the level of poetry.

The only thing I'd adjust is I'd amend the "they" to "we" but that's an incredibly minor quibble Smiley

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Re: Fed Funds Rate, Historical Graph
Reply #28 - Jan 9th, 2016 at 3:50pm
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Queshank wrote on Jan 9th, 2016 at 2:58pm:
I love this.  Well stated almost to the level of poetry.

The only thing I'd adjust is I'd amend the "they" to "we" but that's an incredibly minor quibble Smiley

Queshank


Well, when I said "they", I was referring to Janet Yellen and the rest of the federal reserve decision makers that set the fed funds rate.
  
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Re: Fed Funds Rate, Historical Graph
Reply #29 - Jan 9th, 2016 at 4:27pm
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wyattstorch2004 wrote on Jan 9th, 2016 at 3:50pm:
Well, when I said "they", I was referring to Janet Yellen and the rest of the federal reserve decision makers that set the fed funds rate.


I know.

I'm simply saying expanding it to "we" makes it even more poetic since it can be applied universally and retain the same inner beauty.

Queshank
  

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