Higher interest rates lower inflation by tossing people out of work so that they can’t afford to buy stuff. Things can get worse.
Time to print more “I did that!” stickers.
The orange regime wants the fed to lower interest rates but they’re fucking idiots and don’t understand modern micro and macroeconomics.
Suffice to say June 17th is going to be an… interesting day.
June 17th.
Iceland independence day?
or
Fathers day?WTF happens June 17th?
PS:
I’m a bit sad that Iceland is celebrating June 17th, because Iceland used to be part of Denmark, and I’m from Denmark.
But I would never dream of trying to make them change their mind. It was their decision and I respect that, as do every Dane I know.June 17 is the day the federal reserve meets to set federal interest rates.
The orange regime wants to do deeply, shockingly stupid things to interest rates in the name of short term optics boosts to help the regime in the midterms. Yes, really. The long term effects of those desired changes will probably seriously fucking tank the US economy for a generation or more.
There’s a lot of shit that’s slowly, quietly breaking in our bureaucracy, and yet fucking everyone still seems to convinced that the checks and balances will save us. But the checks are fraudulent and the balances have been tampered with. So who the fuck knows what’s gonna happen.
What a time to be alive 🫠
republicans know full well what they’re trying to do, they’re disaster capitilists. crashing the economy is their end-goal every time they’re elected and normally they succeed.
it’s a big club and we’re not in it
yeah the scariest part of if we get through this. What its going to take to get anything like last millenia normal.
Last time it took over half a million dead, including a president, and several constitutional amendments.
Slow decline into poverty, corruption, and insanity is more likely this time imo.
yeah I don’t get how people can support making exceptions to law to allow their stuff and then still live in a country of law and order without it being a facist state. you have to make the rules first and then abide by them not make them up as you go.
I don’t think my fellow Americans understand anything more complicated than “It feels like this should be legal/illegal so someone needs to make it so.”
The longer I live the more I find that the truth is banal and stupid. Nobody is holding the reigns, they are just floating along on vibes.
The checks said that actually the only check is the American people. They re elected him so there is nothing anyone else can do.
Or Elon stole it. Maybe someday will will know for sure.
yet fucking everyone still seems to convinced that the checks and balances will save us.
Yeah those checks and balances seem top be falling like a house of cards.
What a time to be alive 🫠
Interesting times indeed.
…i think thats the day the new central bank head takes over? Could also be the day trumps 1.7b slush fund becomes available?
Thanks. 👍
I guarantee 100% that Trump & Co. will do everything within their power, including things that are illegal, to lower rates. While Trump appointees are only 3 of 7 Fed governors while Powell remains as a governor, I believe Powell is holding that position to try to negotiate an exit that doesn’t leave him facing retribution, and that he’ll step away from this train wreck when he has sufficient confidence this is the case. However, if he doesn’t strike a deal, Trump will absolutely fire him, or worse, fire up his brownshirts with some stochastic terrorism.
Tbh I wouldn’t be super shocked if Powell ends up just being the shadow-governor emeritus, and fucks with orangeboi’s plans to quickly irreparably nuke the economy.
I still expect the regime to irreparably nuke the economy, as well as the long-term strength of the USD, which may actually end up with the US venturing into insolvency if the world turns away from the USD standard - and it’s looking like the world may ultimately be headed in that direction.
The exodus from the dollar is already well underway. There is a reason gold has been on an epic bull run, as central banks have largely been the driver. Gold holdings now exceed U.S. bond holdings by foreign central banks. Moreover, the U.S. insolvency is already barrelling down the tracks at us. I think there is a high probability that the shit hits the fan in the fall. We’re living in interesting times…
Good thing the turnip is trying to put his own face onto a new $250 bill. It’ll probably be worth $100 by 2029. He’s got such forethought.
i dont even understand why we would have a250 bill when most places dont take bills over 20 anyway
It’s to stroke Il Douche’s ego. Nothing more.
to distract from the eptein files, DOJ trying to intimidate JEAN E Caroll.
40 years ago places had signs saying they won’t take a bill over a 20 and a 20 from back then is way over a 100 today. I have no idea why places don’t take 100’s. Im pretty sure places were taking 20’s for awhile back before then to.
I work at a Domino’s, we only carry $20 for change (so that if we get robbed, we don’t have too much stolen). So, unless your order is over $80, we can’t take the hundo.
Pizza delivery has always been like that. 40 years ago you could not even expect them to have change that adds up to twenty bucks. but like you could fill a car with groceries with 20 bucks and get change. Food delivery you should have over the approximate amount and not expect change honestly.
jokes on them. im already out of work. I think many are now and its not even registering.
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I’m no economist but here’s my understanding: When interest rates go up, borrowing money becomes more expensive. This leads to less borrowing, which reduces the money supply. (When you borrow money from the bank, the bank just creates the money. They’re mostly not giving you existing money.) By reducing the money supply, inflation may be reduced.
Higher interest rate -> decreased borrowing -> decreased money supply -> decreased demand/ability to purchase/inflation/ decreased price increase
Also, higher interest rates flow through to those with existing loans and also if/when they refinance. From businesses to credit cards, payday loans, probably even pawn shops. Even the government itself.
If you have to pay more on your loan, you have less to spend on everything else.
So, interest rate rises also put a handbrake on spending, which slows down the economy, and attempts to slow down inflation too. In theory.
Stay tuned next week where we learn about how once you get inflation reducing, it usually means a rise in unemployment!
The good times never end
the interest rate has been refered to as the price of money.
Interest rates go up which results in increased revenue (and money) for the bank, which doesn’t have value backing it. In essence it increases the amount of dollars in the economy, lowering the value of the existing dollars within the economy.
People don’t just stop borrowing money when interest rates go up, especially when the economy is so bad people can’t afford to live on their pay.
Keep in mind what interest represents to the bank.
You’d think, intuitively, that it works this way but you’re missing the key concept: fractional reserve banking.
The bank doesn’t take $10 from a savings account, loan it out, and then get something like $11 back, thus creating $1 from somewhere.
What the bank actually does is takes $10 from a savings account then magically creates $90 and loans out $100, because somehow they’re allowed to do this. This is fractional reserve banking. They only actually have a fraction of what they loan out.
Banks create money by giving out loans. When loans are more expensive, fewer are given, less loan money is created and the amount of total money in circulation (and inflation) are reduced.
Or at least that’s what I’ve read.
This goes against all the hard data we’ve got from the past 80 years of the Fed independently managing interest rates, but yeah dawg, I’m sure your vibes-based economic theory has finally cracked the code that Shadow Emperor JPow has been hiding from us, and all that rampant inflation from 0% interest rates is fake news.
You’re making a lot of assumptions about how I think here dude. Also i never said that was the only thing that affects inflation.
There are a lot of factors that push and pull. I know there’s a lot of info out there that contradicts what I said but I also know there is a lot of incentive for us to believe that banks increasing rates naturally lowers supply of money in an economy, so of course you’ll find a ton of articles stating that as fact – needless to say I am skeptical.
I don’t know if it’s completely true, just like how the invisible hand of the capitalist economy is assumed to allocate resources effectively, but we know that in practice it does not, because people don’t just choose to stop purchasing things they need when they get expensive.
So my thoughts are this: how much of this theory is based on an assumption of human nature that’s more optimistic than in practice? Because a LOT of our economic theory operates this way.
Low interest rates = more money = more inflation
High interest rates = less money = less inflation
At least that’s the theory. It has been successful at multiple points in our history though.
