Raising the Rates…. Not the Roof.
Hello there again readers and welcome back to Coffee Break Liberty, a blog where we tackle books, news and many other things under the sun where liberty is a guiding principle. If this is your first time here we would like to extend a special warm welcome to you and hope you enjoy yourself while here.
This week the Federal Reserve raised the rates for the fourth time this year. This may seem boring to many, and generally is, but it is important. When we do talk about the fed here it is usually just around the times the rates change and how it will impact things in the future and or why the rates were changed. Another bit of news outta the fed today though that few are even talking about is how there still seems to be no let up at all on the quantitative easing going on in our economy by the fed and other central banks. Last time we talked about quantitative easing was a year ago and can be found here, we will not go into it again this time but rather we will talk more about the rates and why they are changed.
Like we said, many don’t find this kinda stuff interesting or get board with it quickly so we are going to try and hit it hard and fast in an attempt to keep the attention of those that would often lose it in a post like this…. Wish us luck!!
Many are unaware of why the fed even changes the rates in the first place. The quick and easy is, they are trying to influence borrowing, lending and savings habits. But why are they trying to influence these habits? Simply, they are trying to curb the business cycle and the impact it has on the overall economy. Trying to stop the business cycle is like trying to stop the wind from blowing, it just isn’t gonna happen. What’s worse is that the actions taken by the fed make the impact of the business cycle even worse than if it had been left alone. We have seen it time and time again, huge depressions and long drawn out recoveries. Men and women that think they are all smarter than the rest of us keep trying the same medicine to the “sickness” (it’s not a sickness, it is natural) and are expecting different results. Even though every time before the results have been worse than the original “sickness”. What is troubling more is that those that run the fed know that business cycles are naturally occurring in an economy that is capitalistic in nature. Yet they still try to battle it thus causing far more harm than good. None of them, not a single one will deny the business cycle and it’s existence though they will all argue pretty much on how much the fed should get involved. Here is an answer for em, how about not at all please?! We will get into what the business cycle is soon in a future post and will actually link it in this post at that future date but what we want to leave you with now is that they are naturally occurring and the fed keeps trying to stop them, which in turn makes the outcomes far worse.
We are going to cap it off here before we lose those with short attention spans, ourselves included. Keep checking back here though as we make this into a little mini three part series of posts and link them all. There will be at least one post between them all as we work on our year in review and look forward to 2019 but until then…..
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Keep that coffee warm for us.
LWS
