Veeky Forums Help me understand this:

Veeky Forums Help me understand this:
>Consumers are only starting to support the USA economy
>Federal Reserve Raises interest rates to make their mortgages cost more!
Isn't it a bit early to stomp on the brakes in the US??
Or does it mean imports from chima are cheaper so that will balance it out ?

Yes....*Chima .....you know... the Chimese

The feds are fucking retarded. They should implement negative interest rates.

Charge you to keep money in the Banks? Or just charge other banks to keep money in the FED bank?? .
Fucked if I know how it all works!!

HIGHER INTEREST RATES make it more expensive to conduct business don't it?? or does that not happen anymore??

all these retards advocating for higher interest rates are fucking stupid

high interest rates are good for the US economy because it means businesses make stable investments again instead of LOL OFFLOAD EVERYTHING YOU ONLY PAY BACK THE INTEREST ON THE LOAN XD FREE GOBERMENT DOLLERYDOOS THERES NO WAY THIS WILL EVER GO WRONG

Higher interest rates also mean the US dollar appreciates over time which is good for us and for china and an inflow of investment which is good (probably).


People got sick of the economy going to the moon in smoke and mirrors and then challenger exploding all the way back down. Just go for slow growth over time with high interest rates

You don't understand economics or finance shithead.

>all these retards advocating for higher interest rates are fucking stupid
i mean advocating for lower interest rates is fucking stupid
my bad

Agreed, let's crash this economy ASAP and start the cryptocurrency revolution

They say LOW interest rates promote growth.
They say HIGH nterest rates slow growth
Thats why they raise and lower the rates buddy.
Did the fed sort of say because of the upbeat consumer data there will be an interest rate rise maybe two.
Im not fixated on the rates level, just on what they hope to achieve. especially under the current conditions.

High interest rates are a bad sign. Low interest rates are bad sign. Just like a 4 hour erection is bad for you and just like no erection is bad for you.

All I can say is that trickle down economics is a resounding success for the third world. Foreign investment all the way.

i dont even know what youre trying to say

40+ years of artificially low interest rates created 3 bubbles, 1 large recession, and 1 depression are youre worried about moderation in interest rates?

There is no concrete economic data to look at and consumer data is so fucked and distorted by asset inflation and stock market bubbles that its impossible to tell where the economy is actually sitting right now. Super low interest rates cause risky investment that leads to failed industries that drag down the entire economy and pop the bubble. High interest rates ensure that risks are well thought out and stable and make sure that economic growth is stable and permanent instead of the wacky 20,000 DJIA to 7000 DJIA swings in the place of 5 years

Why don't you understand that? thats what we are told all the time.
having said that in my last post, I still think it all about the economic supremacy of the US dollar nothing to do with what they 'they' tell us.Thats why the economic data is meaningless

High interest rates would have WHAT effect on US production manufacturing?

Low interest rates were supposed to do WHAT for the US economy?

US industry will inevitably slow down but the growth achieved in periods of high interest rates is much more stable and likely to be permanent. High interest rates also appreciate the USD so tech industries that rely on many different parts and resources manufactured and collected around the world are likely to be cheaper which increases SRAS due to lower input costs, and likely causes businesses to expand because of lower marginal costs. The economy will correct itself over time and continue steady economic growth with aggregate supply increases. People also have lower prices as a result of aggregate supply which is also good for the economy in the long run.


low interest rates are designed to boost interest sensitive spending components of GDP

The problem with that is when theyre too low they result in stupid investments because there is essentially no risk to anything. Entire industries collapse from bad risky investments and result in asset inflation and a mess of other shit that ruins the economy while still making it look pretty on the outside

Oh look mom, it's a 'consumers create wealth by spending' thread.

My 2nd favorite may may after Pepe.

My personal favorite is a company using loans to buy back company stocks.

thats a smart way to lower dividend costs without cutting it as long as the loan rate is lower

my favorite is a bank receiving $1000 in deposits and loaning out $5000 because they know nobody is going to withdraw all their money at one time and if they get caught with their pants down they just borrow money from another bank or the federal government

DUDE FREE MONEY LMAO

Theoretically, could that sort of scheme be used to raise stock prices forever as long as long as banks have money? It sounds obvious enough for someone to try. Is there a term for this kind of thing?

ITT millenials just found out about the fed
>HURRR Ron Paul Revolution
>#feelthebern
lol go to bed kids i need it's alone time with your mommy

here is ur answer

>All of the stuff in your OP post is painfully fucking wrong

I hate that plebs think they can talk about these things now.

thats not how accounting works

if the bank loans you money it has negative money , the money it "creates" when you deposit isn't useful - they only make money on the interest from the loans

I take a loan : me +1000 but also - 1000 + interest (I owe it back),

bank gives me a loan = bank is -1000 with the hope that I pay it off plus interest

I deposit at the bank = +1000 for bank plus it can "create" more money for loans , but NOT more money it can then use to pay employees or shareholders

does that make sense or do we need to go through it again slowly?

Is that a YES to this section of the my post
> imports from china are cheaper
also like what components? "low interest rates are designed to boost interest sensitive spending components of GDP"

Thats a benefit to sharholders,do they then spend that in the domestic economy?

Found out what dickhead add something to the debate or fuck off.
YOU HAVE TO EXPLAIN WHAT YOU MEAN MEMES AREN'T ENOUGH COMRADE
Add something to the debate then faggot

Do you know how fractional reserve banking works? Or do we need to go through it again slowly?

OP here I think that's what most of the punters givng me shit have actually misread. I deduce they are fervent stock holders that don't realise thats why their stocks haven't crashed... cheap money.

Naah my point is that they say they will raise interest based only on cuntsumers spending more or getting more debt wasn't that the idea in the first place?? I mean consumer spending is not gonna actually save the US economy. YOU need more than that ..so why raise now after the whole decade long 0% interest was meant to do that...now its working BANG up go the rates.

So hows the shorts going boys??? kickin ass today??

Low interest rates lead to a risk of bubbles and overvaluation because investment is king.

Alright I understrand that so why did they cut them to zero..in general of course, explain like I'm 9

Consumer data doesn't fit with my feeling about the economy, therefore, it's skewed and all the numbers are made up.

You're one of those pepole who think unemployment numbers are made up too. All bitching, no research

What happens when we ALL start acting on our FEELINGS man! I mean the plebs who make up the lions share of the market(I assume) 100's of millons of mom&Pop investors just going their own way!
For a logical market/interpretation you need a logical input.

Because asset prices of homes, mortgages and bonds would implode leading to a deflationary spiral. Literally everything in America is financed. If rates rise above the general average people will default en masse. Rates will never be raised above 1% again. We will have another world war, civil war or 'currency crisis' before then. Only death can clear these debts now

That makes sense.

but this would mean even more loans will be taken out to increase the pressure and also because it's cheap so this ride will end in hell.

Basically, you can't go forever without clearing the bullshit.