Posted September 11, 2009 - 07:04 by Jabulani Leffall
So everybody is saying it may finally be over, this recession. And it may very well be but if you're thinking that a turnaround is here and your money is burning a hole in your pocket and you want to spend as you did in headier times, think again.
Posted July 31, 2009 - 04:00 by Jabulani Leffall
In order for the economy to turn around it has to hit what so many investment experts and economic forecasters call the "bottom," but what is it, this bottom, what does it look like and with all of this conflicting data, how should we tailor our own spending habits?
Posted June 12, 2009 - 00:39 by Philip Brewer
The Wall Street Journal has an opinion piece by Arthur Laffer that shows a scary graph of the monetary base, which has surged enormously in the past year. He suggests that this is "potentially far more inflationary" than the monetary policies of the 1970s. I'm as worried about inflation as anybody, and agree that the Fed should already be taking steps to minimize it, but I think Laffer is off-base here.
Posted March 24, 2009 - 08:15 by Philip Brewer
Stagflation, the bane of the 1970s, is pretty much the worst situation for ordinary folks. With the economy depressed, jobs are scarce for workers and profits are scarce for business owners. With entrenched inflation, everyone's savings are constantly eroding. The result is that nowhere is safe for your money: not cash, not your business, not the market. With the latest moves by the Fed, I fear we're facing a repeat--only it'll be worse this time: stag-hyperinflation.
Posted October 8, 2008 - 07:14 by Philip Brewer
For a decade, starting in the mid-1990s, the Federal Reserve kept interest rates too low and expanded the money supply too quickly. Their theory was that, as long as consumer prices were stable, they must not be creating too much money. We now know that they were wrong.
Posted May 25, 2008 - 13:07 by Philip Brewer
Every financial calculation that you make is influenced by your expectations for future inflation: how much to borrow, where to put your savings, and whether your last raise was a reason to celebrate or to start looking for a better job. Even small decisions, like whether to buy a couple extra cans of tomato paste, are affected. No dollar amount or interest rate is good or bad, except when compared to inflationary expectations.
Posted May 20, 2008 - 07:56 by Philip Brewer
The Federal Reserve has proposed some new rules to protect people from a list of abusive lending practices. The changes aren't in effect yet, and may not actually go into effect. It's worth looking at the proposals, though, to understand what's been going on just lately. If you haven't been paying attention, you probably have no idea what the credit card companies can legally do to you.
Posted April 12, 2008 - 23:43 by Jabulani Leffall
Paul Michael essentially wrote this post in January but it needs to be said again. A culture that remedies a systemic problem that stems from borrowing, with, well...more borrowing, deserves what it gets. Some how the macro actions of the government are part and parcel to and an excuse for micro methods of the individual consumer - a continuing circle of debt.
Posted April 4, 2008 - 05:33 by Philip Brewer
Interest rates for ordinary savers held up pretty well after the first Fed rate cut in July last year. There was a simple reason--banks needed the money. With the credit squeeze making it tough for banks to raise cash, the last thing they wanted was for savers to draw their money out in search of higher returns. The Fed's efforts to relieve the squeeze have been somewhat successful--banks have substantially cut the rates they'll pay savers.
Posted August 17, 2007 - 16:59 by Philip Brewer
In response to the recent credit squeeze, the Federal Reserve did something unusual: they cut the discount rate without cutting the federal funds rate. The federal funds rate is the rate at which banks lend to one another. The discount rate is the rate at which the Fed itself will lend money to banks. For the past few years, the Fed has closely coordinated changes in these rates, so to change one without changing the other is a departure.Have more to say? Join the discussions at Wise Bread's Finance and Frugality Forums.
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