Why play all of these incredibly stupid games with interest rates?

The Federal Reserve should immediately raise the Federal Funds Rate to 5.25% where it was in August 2007 in one single move and should raise the Federal Discount Rate to 5.00%. Just do it and get it back to where interest rates belong and where they have almost always been historically.

Real interest rates need to be at 3% plus a factor for expected inflation plus a factor for risk. The standard mathematical result is around 5.25%. That is exactly where Regulation Q of the Glass Steagall Act fixed interest rates paid on savings accounts at banks for over 60 years from 1934 into the 1980s. During that times savers prospered and banks prospered on the spread between that rate and the 7% or so they charged on mortgages and other loans.

Rates should not be moved up and down. When the business cycle weakens, after initially moving up, rates will naturally fall because there will be less demand for money. So, the Federal Reserve is really an irrelevant institution, whose actions serve the international bankers, but which increases volatility, rather than decreasing it.

That being said, so long as we have the Federal Reserve, an institution that is controlled, in large part, by foreign bankers and big American banks with a foreign orientation, the Fed will be playing with rates and printing cash for the purpose of bailing out U.S. and foreign banks who are short the dollar, and gotten caught with their pants down. This hurts most Americans, including small to medium sized American banks.

The Fed, like the 2nd Bank of the United States back in 1835, is a fundamentally corrupt institution. They may not be taking overt “bribes” in the form of cash passing hand to hand, but the international banks are its overlords, and tell it what to do. This situation is not healthy, or beneficial to the United States of America. They will allow a temporary rise in the U.S. dollar soon, but, later, will start up the printing presses yet again.

The only long term solution for individuals, unfortunately, is and will continue to be the purchase of gold — unless the Fed is shuttered for good. If it is shut down, the dollar will soar (after initially falling a lot from the fear reaction).

It is way past time for all of this manipulative game playing with interest rates to end and get back to STABLE AND FIXED RATES which enable predicable saving and lending again.

- American Patriot, JacksonCPA

Related Posts:

• If you want a simple snapshot of what’s going on here, that’s different than before, listen up…
• 1929 and 2008 Credit Crisis - The Great Depression I and II.
• Here’s a promising article: “Fed moves to drain some money out of economy” (posted on yahoo at 4:01 pm today)
• This nonsense of playing with interest rates going up and down like a yoyo needs to be put to a stop.
• This nonsense of playing with interest rates going up and down like a yoyo needs to be put to a stop.

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