Quote:
Originally Posted by Sooner or later
Damn, that has nothing to do with fed lending rates. The fed adjusting lending rates to match economic conditions is not the actual CAUSE.. It is a SYMPTOM.
You are still barking up the wrong tree. Lower rates DO NOT CAUSE INCREASED SPENDING OR ADDITIONAL DEBT LOAD WHICH IS THE PROBLEM.
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Until 12/14 the FED was printing..the EU kept at it until at least.12/18. The Chinese state owned banks reduced lending requirements...easy money...thus their form of juicing. They are still doing it..
Without fed juicing us equities went flat in 15..
The other tenent of qe3 was keeping interest rates low until the cows came home..it was a 2 pronged policy. Somebody whispered in the FED'S ear that they couldn't keep printing without unintended blow back. So they Tapered off the printing.
FED policy facilitates or enables the govt to borrow..by keeping interest rates low the govt can borrow more at a lessor cost. With the massive quantities of newly printed it insures plenty of liquidity sloshing around to buy debt.)
The FED provides the liquidity and cheap cost so the govt etc can borrow which then gets recycled through the economy. Thus the lights stay on and the wheels turn.
The irony has been that the global economy so worries everybody in the world that they flock to the high ground safety of usd, equities, bonds re. Which has been a boon to the us.