Tag: interest-rates

How Savings and Investment Increase an Economy’s Output

Filed in BP, Debt, deflation, economy, interest-rates, Lear, o, silver, Spot Gold, target, US Dollar by on February 14, 2011 0 Comments

Everyone who has held a job and a bank account understands the potential benefit of postponing consumption today in order to enjoy greater consumption in the future. However, many people — if pressed — would explain this increase in saver’s income by an offsetting reduction in the income of a borrower in the economy. This is certainly a possibility. For example, if Bill (the borrower) forgets his lunch money on Monday, he might ask his coworker Sally (the saver), “Can you lend me $10 and I’ll pay you back $11 tomorrow?”  If Sally agrees, then it is clear that her $1 in interest on the personal loan was paid out of Bill’s reduced income for that month. In other words, if Bill’s take-home pay that month were $5,000, then he would actually only have $4,999 to work with, because of his $1 expenditure in “buying a loan” from Sally. At the same time, if Sally’s normal paycheck were also $5,000, then this particular month she would actually have $5,001 to work with, after earning $1 in providing “lending services” to Bill. In the scenario above, what basically happened is that Bill financed his consumption with an “advance” made by Sally. On the Monday morning is question, …

Continue Reading »

Fed Members Differ on Economic Outlook

Fed Members Differ on Economic Outlook

Filed under: Economic Data , Federal Reserve , Recession The Federal Reserve has embarked on a controversial new program of buying $600 billion of U.S. Treasuries to keep interest rates low and spur the economy. There is some disagreement among some members of the Fed concerning the risks of this new program. Some fear that the economy is growing too rapidly, fueling unwanted levels of inflation, as reported by CNNMoney . Continue reading Fed Members Differ on Economic Outlook Fed Members Differ on Economic Outlook originally appeared on BloggingStocks on Wed, 05 Jan 2011 12:00:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

Continue Reading »

Federal Reserve Gave 9 Trillion Worth of Emergency Loans to Major Banks At Near Zero Interest Rates

Filed in Bank Gold, depression, economy, Federal Reserve, Gold Spot Market, o by on December 1, 2010 0 Comments

Today, the private Federal Reserve was forced to reveal that they loaned upwards of 9 trillion dollars to major financial institutions in emergency overnight loans. These loans were done in complete secret, used to “save” the economy, which had slip into a deep staged economic depression. Most of the money has been paid back, yet the interest rates that these major institutions received were near ZERO. That’s right, The Federal Reserve bailed out their partners on Wall Street at near zero interests rates while everyday American citizens have been continually blasted by high interests rates around every corner.

Continue Reading »

Hoenig: QE2 Won’t Work

Hoenig: QE2 Won’t Work

As the biggest hawk on the meter, this one shouldn’t come as much of a surprise. True to from, Kansas Fed President Thomas Hoenig is no big fan of QE2…. From Reuters by Ann Saphir entitled: More Fed easing likely won’t help economy:Hoenig “Kansas City Federal Reserve President Thomas Hoenig, who all year has steadfastly opposed the Fed’s super-easy monetary policy, fleshed out his stance against further easing on Tuesday, saying it would do little to aid recovery and could spark inflation. The Fed has kept interest rates near zero since December 2008, and bought $1.7 trillion in mortgage-back securities and Treasuries to support economic recovery. Markets are pricing in expectations the Fed will move to drive down interest rates further to help boost the economy, restarting Treasury purchases as soon as next month in a new round of quantitative easing, or QE2 as it has come to be known. “We have to recognize that QE2, while a possibility, is not necessarily what we want to do given the benefits versus the risks,” Hoenig told the National Association of Business Economics. “At this point, with a modest recovery under way and inflation low and stable, I believe the economy would be better served by beginning to normalize monetary policy.” Expectations of further monetary easing in the United States have already pushed up currencies in countries from Latin America to Asia, prompting loud complaints. Hoenig, as one of the Fed’s most consistent hawks more concerned with the threat of inflation than unemployment, said the Fed needs to be mindful of such spillover effects. “We are not an island,” he said. “We affect other countries, they know that and they react to us, and therefore we are affected by our actions as it comes back to us.” Many analysts believe that the Fed has signaled so strongly that further easing is imminent that it cannot back down without disrupting bond markets. Hoenig took exception to that view, saying the Fed’s responsibility is to the broader public, not just the financial markets. “We have to do what we think is right – they have to adjust their policies accordingly, not us,” he said. In any event, he argued, further purchases of Treasuries would not drive down interest rates by much.” Is it me… or is groovy Ben about to drive the magic bus right off the cliff? Related Articles: Commodities are Poised to Head Higher The Greenspan Curse Jim Rogers: $2000 Gold is a “Given” Paulson Sees Inflation on the Horizon To learn more about Wealth Daily click here Advertisement The overnight comeback of North American oil This $4-a-share driller is the front-runner in a forgotten oil field that’s all of a sudden the hottest energy territory in the Western Hemisphere . Their new drilling technology is the key — here’s the proof that two-year gains of 1,239% or more await those who move fast…

Continue Reading »

Gold Prices Shine for Eighth Straight Quarter

For the eighth quarter in a row gold prices have ended in positive territory, as everything which supports gold remains in place. Adding to the recent push is the realization we’re still in a recession, and a long way from emerging from it. That means the inevitable interference of the government via quantitative easing, where they waste money by attempting to throw it at the problem again, even

Continue Reading »

Barclays (NYSE:BCS) Sees Gold Remaining Strong in Fourth Quarter

With fundamentals expected to remain in place, Barclays (NYSE:BCS) believes gold will continue to perform strongly in the fourth quarter. Barclays said “we maintain our view for the fourth quarter of this year to be the strongest quarter on record yet for gold prices, with downside corrections finding support from the seasonally strong period for fabrication demand with the forthcoming wedding

Continue Reading »

Secrets to Getting the Best Mortgage Refinance Deal

Filed in ceo, Debt, dividend, Gold Investment, interest-rates by on September 10, 2010 0 Comments

Falling interest rates are a hot topic these days, and contacting your mortgage lender about refinancing to a lower rate could be a great idea to save you tons of money. Before you make the call, though, you’ll need to put together some details to share with the phone representative. First of all, you’ll need to make sure you’ve been paying your mortgage on time. Stress that fact to your lender — harp upon it several times to make sure they know you’re a responsible borrower. Next, you’ll want to highlight your positive credit history. Your lender is going to check your credit, so do whatever you can beforehand to make sure your credit history is solid. Then, make sure to organize your income tax documents so you can verify your current financial situation. Now, if you’ve recently lost your job or have less-than-stellar credit, you’ll need to disclose that information to your lender. It will almost certainly negatively impact your potential rate savings, but it’s best to lay everything on the table up front. Everyone appreciates honesty! Another big factor in refinancing is the home appraisal. Your home needs to be appraised to make sure you qualify for a better rate, and also to ensure it compares well with recent sales in your area. With home values having gone down nationwide, you need to be sure your debt-to-income ratio also falls favorably. If you take care of these factors first, you’ll be well on your way to working a better interest rate for your mortgage! A final option to consider is perhaps reducing the length of your current mortgage, instead of refinancing back to a 30-year program. This option is particularly attractive if you plan on staying in your home for several years. You’ll undoubtedly be offered a better rate on a 20-year mortgage, for example, than a 30-year — just be sure you can afford the monthly payment. Paul Rubillo is the founder and CEO of Dividend.com. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

Continue Reading »

Let’s Make a Deal: How the Mergers-and-Acquisitions Boom Will Hurt the U.S. Economy

Filed in bhp billiton, dividend, economy, Gold Investing, Gold Prices by on August 31, 2010 0 Comments

With its $39 billion hostile bid for Canada’s Potash Corp. (NYSE: POT ), mining giant BHP Billiton Ltd. (NYSE ADR: BHP ) capped an active August in the mergers-and-acquisitions market. With the moribund growth prospects of the U.S. economy, there would seem to be no great urgency for companies to go on an M&A spree, yet the total value of announced buyout deals for August alone has topped $175 billion. Cynics are reaching only one conclusion: With interest rates so low and corporations so cash-rich , it seems that company management teams would rather do anything with that cash than to give it back to shareholders via stock buybacks or boosted dividends. And those deals signal additional trouble ahead for the U.S. economy. To understand the problems that this rampant dealmaking figures to cause, please read on…

Continue Reading »

New database on the maturity structure of publicly-held debt

Filed in Federal Reserve, Gold Prices by on August 29, 2010 0 Comments

I have been working on a project with UCSD graduate student Cynthia Wu to try to assess the potential for the Federal Reserve to continue to influence long-term interest rates even when the short-term interest rate is essentially at zero. I’ll be rela…

Continue Reading »

New database on the maturity structure of publicly-held debt

Filed in Federal Reserve, Gold Prices, silver by on August 29, 2010 0 Comments

I have been working on a project with UCSD graduate student Cynthia Wu to try to assess the potential for the Federal Reserve to continue to influence long-term interest rates even when the short-term interest rate is essentially at zero. I’ll be rela…

Continue Reading »

Market Wrap-Up for June 23 (PM, JBL, V, DVN, ANF, more)

Filed in dividend, earnings, Gold, Gold Investment, ubs by on June 23, 2010 0 Comments
Market Wrap-Up for June 23 (PM, JBL, V, DVN, ANF, more)

As expected, no interest rate increase from the Fed today. Raising interest rates is highly unlikely, especially with the latest housing data out the last couple of days. Just this morning we learned that sales of new homes fell a record 33% in May following the expiration of a subsidy for home buyers. The markets finished mixed, a bit better than the reversal to the downside we experienced yesterday afternoon. Phillip Morris International ( PM ) trading higher after some positive earnings comments, despite a currency overhang. Jabil Circuit ( JBL ) also bucked the downtrend on good earnings results. As for some names that pushed lower today, Visa ( V ) , Devon Energy ( DVN ) , and Abercrombie & Fitch ( ANF ) all finished in the red. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

Continue Reading »

Banks Profit From Near-Zero Interest Rates: Another Reason for States to Own Their Own Banks

Filed in economy, gld, Gold, interest-rates by on June 6, 2010 0 Comments

…but the purpose of the near-zero interest rates was supposed to be to get the banks to lend again. Instead, they are investing this virtually interest-free money in risk-free government bonds, on which we the taxpayers are paying 2.5% interest; or are using the money to engage in the same sort of unregulated speculation that nearly brought down the economy in 2008, or to buy up smaller local banks, or to pay “outrageous bonuses to their top executives.” …Owning their own banks can allow local governments to tap into the very low interest rates available to private banks, by giving them the same authority to create “bank credit” on their books that private banks have. Interest (undeservedly collected by private banks) is the root of our excessive tax problem. WRH permalink

Continue Reading »