Accidental Libertarian Tweet of the Day
Comments
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Someone has to fund our debt. Someone needs to authorize spending money, not to promote core government obligations, but to buy off special interest groups. I'm no fan of the fed, but the fed didn't pass the "Make Inflation Greater Act". Some minor dem political figure ran on the program that "Milton Friedman wasn't in charge anymore" and had the full support of our hypothetical MBA.Bob_C said: -
The Fed has backed and cheerled all of the bad spending.
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Agreed. But the spending money we don't have is set by Congress as supposedly elected by US citizens.Bob_C said:The Fed has backed and cheerled all of the bad spending.
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The "Fed" is controlled by the central banks, not vice versa
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The big mistake was lowering interest rates to ridiculously low levels during COVID in the first place. Sure, I benefited on a refinance of my mortgage, but it was a major cause of inflation, and now the fed has to correct the balance by jacking up rates to ridiculous levels as a desperate means to get inflation under control.
In doing this, they run the risk of overcorrecting before allowing enough time for the economy to respond, and then they'll have to drastically reduce rates again, which again they might be overcorrecting in that regard, similar to how a driver jerks the steering wheel when they start to drift off the road, and then jerks it back, causing a major wreck. -
Spending and stimulus checks had far more to do with inflation than low rates.Fenderbender123 said:The big mistake was lowering interest rates to ridiculously low levels during COVID in the first place. Sure, I benefited on a refinance of my mortgage, but it was a major cause of inflation, and now the fed has to correct the balance by jacking up rates to ridiculous levels as a desperate means to get inflation under control.
In doing this, they run the risk of overcorrecting before allowing enough time for the economy to respond, and then they'll have to drastically reduce rates again, which again they might be overcorrecting in that regard, similar to how a driver jerks the steering wheel when they start to drift off the road, and then jerks it back, causing a major wreck. -
Seems like best practice would then be to revert to a gold-backed currency and cut the Fed out all together.Fenderbender123 said:The big mistake was lowering interest rates to ridiculously low levels during COVID in the first place. Sure, I benefited on a refinance of my mortgage, but it was a major cause of inflation, and now the fed has to correct the balance by jacking up rates to ridiculous levels as a desperate means to get inflation under control.
In doing this, they run the risk of overcorrecting before allowing enough time for the economy to respond, and then they'll have to drastically reduce rates again, which again they might be overcorrecting in that regard, similar to how a driver jerks the steering wheel when they start to drift off the road, and then jerks it back, causing a major wreck.
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Agreed, the rates were already lower in early 2020 than they naturally should have been. It was the stimulus to prop up demand combined with simultaneously forcibly shutting down the supply side.UW_Doog_Bot said:
Spending and stimulus checks had far more to do with inflation than low rates.Fenderbender123 said:The big mistake was lowering interest rates to ridiculously low levels during COVID in the first place. Sure, I benefited on a refinance of my mortgage, but it was a major cause of inflation, and now the fed has to correct the balance by jacking up rates to ridiculous levels as a desperate means to get inflation under control.
In doing this, they run the risk of overcorrecting before allowing enough time for the economy to respond, and then they'll have to drastically reduce rates again, which again they might be overcorrecting in that regard, similar to how a driver jerks the steering wheel when they start to drift off the road, and then jerks it back, causing a major wreck. -
I'm no expert but weren't interest rates low for years to protect the housing market which was saving the economy and generating paper wealth?
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Absolutely, which is why rates shouldn't have been that low in addition to those causes.UW_Doog_Bot said:
Spending and stimulus checks had far more to do with inflation than low rates.Fenderbender123 said:The big mistake was lowering interest rates to ridiculously low levels during COVID in the first place. Sure, I benefited on a refinance of my mortgage, but it was a major cause of inflation, and now the fed has to correct the balance by jacking up rates to ridiculous levels as a desperate means to get inflation under control.
In doing this, they run the risk of overcorrecting before allowing enough time for the economy to respond, and then they'll have to drastically reduce rates again, which again they might be overcorrecting in that regard, similar to how a driver jerks the steering wheel when they start to drift off the road, and then jerks it back, causing a major wreck.
