If the Fed is going to keep rates low, then...

MoneyLA

If the Fed is going to keep rates low, then it needs to take one more step to fix the economy: make sure there are low rates.

If they really want low rates to help the economy they should slap the banks and credit card companies with limits on credit card interest rates. Allowing banks to still charge 30% or even 15% is sick when other rates are around 2% and CDs pay 1% or less.


Meanwhile, the low interest rates from the Fed could help gold to rally as low rates do not compete with gold for return on investmen.

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jmski52

The rate on 90-day T-Bills, minus the Inflation Rate = the Real Interest Rate

Whenever the Real Interest Rate is Low or Negative, gold does very well.

We know that the 90-day T-Bill rate is 0.25% or less. If the Inflation Rate is more than 0.25%, then you should expect the gold rally to continue.

See where I'm going with this? What do you think that the Inflation Rate is?

renman95

<< <i>The rate on 90-day T-Bills, minus the Inflation Rate = the Real Interest Rate

Whenever the Real Interest Rate is Low or Negative, gold does very well.

We know that the 90-day T-Bill rate is 0.25% or less. If the Inflation Rate is more than 0.25%, then you should expect the gold rally to continue.

See where I'm going with this? What do you think that the Inflation Rate is? >>



Around 10+% (whisper: including volatile food and energy).

Goldbully

This mime kept rates low for many many years!!

MsMorrisine

we have had lower rates than when he was running the Fed and there is no housing bubble.

It's not just low rates that lead to bubbles. It's also foolish business practices.

goingbroke

After watching the banking fiasco for the last few years, with its attendant bribes for politicians and regulators, I now understand why I was not taught about Andrew Jackson in school. That man deserves a sainthood for killing the banks. He knew what they were about.

pmcollectour

<< <i>
If they really want low rates to help the economy they should slap the banks and credit card companies with limits on credit card interest rates. Allowing banks to still charge 30% or even 15% is sick

] >>



I like the higher rates on credit cards because it could discourage excessive borrowing, and force people to save their money before they make a purchase. Look what happened when Barney Frank and company allowed AIG to give money to people for homes at really low rates.
That system failed, as would credit cards at 1-4% interest.

BAJJERFAN

30% interest on CCs doesn't mean squat if you don't keep a balance. 30% interest on someone who can't afford to pay you doesn't mean squat except that they keep owing you more and more that will get to the point where you will get out the ketchup and eat it.

The biggest benefactor of low rates is Unka Sugar himself. As long as interest on the debt is manageable that is all the Guvmint cares about.

cohodk

<< <i>30% interest on CCs doesn't mean squat if you don't keep a balance. 30% interest on someone who can't afford to pay you doesn't mean squat except that they keep owing you more and more that will get to the point where you will get out the ketchup and eat it. >>




My thought as well. If you dont like the 30% on your credit card, then pay it off. The teaser low rates on credit cards 5 years ago got many Americans into the mess they are in now.