What is this supposed to do? I see no effects of this what so ever. They have done it 7 times this year and I haven’t notice anything at all. Oh, I know. It is for large items like houses, which I still can’t afford since my interest that I am paying for my credit cards and cars has stayed the same. What they need to do is set a cap on credit card interest at around 13%. Thus paying you debt faster, thus freeing money to buy (with cash) goods and services thus boosting the economy.
Well, the housing sector (along with consumer spending) has been what is keeping the economy afloat right now. Unfortunately, all these rate cuts will probably lead to long term inflation, but Mr. Greenspan is basically keeping our economy on life support until the world economy recovers and it can absorb the crash we’d have. And you should know by now that you’re a mindless cog in our economic machine.
That I Am.
I suspect that the economy has changed in some way OR rate cuts take a while to filter through the economy.
Rates down = cheaper credit to buy goods from japan hence no change to employment ?
Speak for yourself.
You are probably not going to see a whole lot of movement upward in the market during the whole Bush presidency. The nation is treading water until we can ** elect ** a president. The hope is that we don’t go into recession. Bush started it off wrong by predicting a recession, then continues with a tax cut in the face of this predicted recession, and now wants a huge increase in spending for his missile defense plan and other military expenditures. This is not a recipe for progress. It looks like the deficit will increase again, layoffs are up, there is no confidence.
I remember a year or two ago, when the Fed was raising interest rates agressively, many people were saying the exact same thing.
Anyway, the effect of the rate cuts may be to make the current slowdown/recession less severe than it otherwise would have been.
Side note: I’ve been looking at various theories for the causes of the Great Depresssion. One of the more credible theories is that for various reasons (including a laissez-faire economic philosophy and adherence to the Gold Standard) central banks did not lower interest rates and in many cases increased them, turning what would have been a short recession into a major downturn.
It is said that this downturn is because interest rates were raised a year or so ago and that the result of the decreases will not be felt until next year at which time it will be deemed necessary to raise interest rates which will not be felt until the next year and the beat goes on…
This would be a good example of an unintended consequence.
If they capped credit cards at 13%, then most of us probably wouldn’t be given credit cards.
Due to default rates they need to charge high interest rates in order to cover their losses.