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DA SPRING/BREAK REPORT: MARCH MADNESS EDITION
#51
(05-01-2019, 11:41 PM)oly2059 Wrote:
(05-01-2019, 10:12 PM)aqua Wrote:
(05-01-2019, 10:07 PM)andrew_o Wrote: The Fed said a few months ago that it was unlikely rates would change this year.

Meanwhile, I can get more interest on my money than the Fed.

Maybe I'm a skillful negotiator ?

....or something is rotten in Denmark.

The chances are that you are a congenital moron.

oly

Wink  We're two peas in a pod, aren't we, Ollie.

But to be honest, I was hoping it was my rugged good looks that got me a larger rate of return than the Fed could get.

[Image: like-two-peas-in-a-pod-cartoon-vector-2879119.jpg]
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#52
(04-28-2019, 05:14 PM)oly2059 Wrote:
(04-28-2019, 08:01 AM)This  cbeatty Wrote:
(04-26-2019, 12:19 PM)aqua Wrote:
(04-20-2019, 04:12 PM)cbeatty Wrote:
(04-04-2019, 06:09 PM)aqua Wrote: The Federal Reserve does not set interest rates, they just follow them.

I have heard this for the last 40 years. I call BS.

We may have an opportunity to test the theory.


I believe there is a Fed meeting coming up on April 30th ?

The current Fed Rate is between 2.25 and 2.5%.

But I can get 2.85% for 15 month CD's at my credit union.

I also have been getting advertisements in the mail from banks I have never done business with, offering 2.95% for 22 month CD's.

If the going rate is really 2.25 to 2.5% why do these businesses want to borrow from me at a higher rate, when they could borrow the money from the Fed at a lower rate ? ?

I wish I knew. I would like to hear Oly's response to this question. It could have something to do with duration. I don't know why banks would solicit deposits at all based on theories forwarded that there are very loose reserve requirements, that there are large amounts of excess reserves, and that banks don't lend deposits but create the money needed to fund their loans.

Traditionally, you would build up your bank on a base of long-term deposit customers and a base of long-term, creditworthy borrowers.  Obtaining your net interest margin in this way resulted in the largest profits.

In the old days, the bank examiners might even caution bankers if they became too dependent on short-term overnight borrowings.  

In the old days, bankers who used overnight borrowings were required by those other bankers who lent to them to let those "lines of credit" 'rest' unused for a week or two at least once a year.

When the Federal Reserve was recently jacking interest rates, the bankers who still followed the old ways suddenly saw a great revival in their profits.  But those traditional guys had suffered for a long time.

Banking is not about speculating.  A properly run bank is a 'sure thing' type of business, not a gambling den.

oly

Thanks for the response. Below is a link to an interview of Dr. Lacy Hunt by Eric Townsend. Of the three videos, it is to the left. At about the 40" mark it gets pretty interesting. Among several points, he posits:
1. When govt debt is at a certain level, further debt growth pushes interest rates down.
2. The FED has no authority to monetize debt; only has authority to buy certain classes of assets.
3. Money supply is equal to the monetary base and the multiplier, which is endogenous to the FED.

My thought is that the authority to buy certain classes of assets, is the de facto ability to monetize the debt AND the de facto ability to increase the monetary base. Dr Hunt is a very thoughtful guy ---- perhaps I'm not yet grasping his points. Anyway, the entire interview is very good. I think you might enjoy it.

http://www.realecontv.com/videos/prices/...-2019.html
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#53
(05-05-2019, 09:55 PM)cbeatty Wrote: Thanks for the response. Below is a link to an interview of Dr. Lacy Hunt by Eric Townsend. Of the three videos, it is to the left. At about the 40" mark it gets pretty interesting. Among several points, he posits:
1. When govt debt is at a certain level, further debt growth pushes interest rates down.
2. The FED has no authority to monetize debt; only has authority to buy certain classes of assets.
3. Money supply is equal to the monetary base and the monetary base, which is endogenous to the FED.

My thought is that the authority to buy certain classes of assets, is the de facto ability to monetize the debt AND the de facto ability to increase the monetary base. Dr Hunt is a very thoughtful guy ---- perhaps I'm not yet grasping his points. Anyway, the entire interview is very good. I think you might enjoy it.


sounds like it could  be good

but I SEE NO LINK!

found it

https://www.youtube.com/watch?v=Hye3ScErES8
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#54
(05-06-2019, 02:30 AM)DaveGillie Wrote:
(05-05-2019, 09:55 PM)cbeatty Wrote: Thanks for the response. Below is a link to an interview of Dr. Lacy Hunt by Eric Townsend. Of the three videos, it is to the left. At about the 40" mark it gets pretty interesting. Among several points, he posits:
1. When govt debt is at a certain level, further debt growth pushes interest rates down.
2. The FED has no authority to monetize debt; only has authority to buy certain classes of assets.
3. Money supply is equal to the monetary base and the monetary base, which is endogenous to the FED.

My thought is that the authority to buy certain classes of assets, is the de facto ability to monetize the debt AND the de facto ability to increase the monetary base. Dr Hunt is a very thoughtful guy ---- perhaps I'm not yet grasping his points. Anyway, the entire interview is very good. I think you might enjoy it.


sounds like it could  be good

but I SEE NO LINK!

found it

https://www.youtube.com/watch?v=Hye3ScErES8

Sorry, and Thanks. I posted the link in the original message and here it is again. I hope it matches the program that you linked.


http://www.realecontv.com/videos/prices/...-2019.html
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#55
(05-06-2019, 02:30 AM)DaveGillie Wrote:
(05-05-2019, 09:55 PM)cbeatty Wrote: Thanks for the response. Below is a link to an interview of Dr. Lacy Hunt by Eric Townsend. Of the three videos, it is to the left. At about the 40" mark it gets pretty interesting. Among several points, he posits:
1. When govt debt is at a certain level, further debt growth pushes interest rates down.
2. The FED has no authority to monetize debt; only has authority to buy certain classes of assets.
3. Money supply is equal to the monetary base and the monetary base, which is endogenous to the FED.

My thought is that the authority to buy certain classes of assets, is the de facto ability to monetize the debt AND the de facto ability to increase the monetary base. Dr Hunt is a very thoughtful guy ---- perhaps I'm not yet grasping his points. Anyway, the entire interview is very good. I think you might enjoy it.


sounds like it could  be good

but I SEE NO LINK!

found it

https://www.youtube.com/watch?v=Hye3ScErES8

I think Lacy Hunt has it backwards, right? The political crisis is what would lead to hyperinflation. The monetary and fiscal policies are just reactions. You don’t blame the apple when it falls and hits your head, you know.
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#56
(05-14-2019, 09:28 AM)aradralami Wrote: I think Lacy Hunt has it backwards, right? The political crisis is what would lead to hyperinflation. The monetary and fiscal policies are just reactions. You don’t blame the apple when it falls and hits your head, you know.

The cause and effect around economic events has often been contentious on this board.

Another version of: What came first, the chicken or the egg ?


Nice to see a new poster.  Welcome
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#57
[Image: economic_indicators_cartoon_02.24.2016.png]
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#58
[Image: transport-pothole-pot_hole-pot_hole-high...60_low.jpg][Image: Stocks-Gold.png]
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