Fed Decides Not To Change Interest Rate


The Fed today decided to keep the prime rate at 0.25% because the economy has not yet grown to the extent they want it to.

It’s obvious to most of us that the economy has not grown. What’s most disturbing about this to me is that the Fed is hesitant to ever reduce its rate lower than 0.25%. A 0% or negative interest rate is probably necessary at this point if a rate as low as 0.25% is not accomplishing much of anything.

Keep in mind, a 0% rate would allow banks to loan each other money without having to pay interest. A negative rate would mean banks would pay consumers interest to take out loans; and banks would charge consumers interest on the money the consumers are loaning the banks. The banks, obviously, do not like the idea of the shoe being on the other foot even for a relatively short period of time.

This is where Fed corruption comes into play. This is why the Fed needs to be reformed, not abolished. We must hold the government accountable for not enforcing the Fed and requiring it to do its job, continuing to lower the interest rate until our economy rebounds. It may be unpleasant for the banking industry to have to deal with a period of negative interest. But the Fed’s job is not to protect private banks. Private banks created much of our current economic problems and consequently they’re going to have to take a hit like the rest of us. This is the beauty of capitalism when it is administered correctly.

Write your representatives and Demand That They Tell Bernanke To Continue To Reduce Interest Rates Until Our Economy Shows Real Signs Of Recovery! It’s our obligation as Americans to hold our elected leaders accountable for not forcing Bernanke to do his job.

Advertisements

3 Comments

    Trackbacks

    1. What Is Deflation? « econprofessor
    2. Some Investment Tips During A Slow Economy « econprofessor
    3. Even More Benefits of the Fair Tax « Econoblog

    Your Thoughts?

    Fill in your details below or click an icon to log in:

    WordPress.com Logo

    You are commenting using your WordPress.com account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out / Change )

    Connecting to %s

    %d bloggers like this: