Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (27054)	2/23/2005 1:48:04 PM
From: Elroy Jetson	Respond to of 110194

When I talked to Citibank Visa employees they thought the same thing - unless people run balances Citibank has to lose on their "Dividend Card". I think most people will be limited to a 1% rebate by the $300 annual limit on rebates. If you used the car only for gas, supermarket, and drugstore purchases to earn the 5%, then you are limited to only $6,000 per year of charges or $500 per month. Charge $30k per year with the card and you're down to 1% no matter where the purchases were. I think very few people would charge only $6k per year on the card before using a different card - though some certainly will. The Citibank employees I spoke with claimed to be doing that. Years ago I got a free membership in Idine, now called the Rewards Network. You can register three of your credit cards with the program. When ever you charge a meal at one of the restaurants on their list they give you a 15% rebate on the total bill, including tip. I pay no attention to who is on the list but still end up with several rebates per month. I think you can still get a free membership a number of ways, I think perhaps with membership in AAA - things like that. rewardsnetwork.com .

To: ild who wrote (27054)	2/23/2005 2:03:05 PM
From: ild	Read Replies (2) \| Respond to of 110194

NEW YORK (Dow Jones)--Federal Reserve Bank of Atlanta President Jack Guynn warned that the central bank still has a fair amount of interest rate hikes ahead of it as it seeks to keep prices from rising too fast in a maturing economic expansion. "The present fed funds rate is still accommodative, and with an economic expansion that now seems to be well established I believe the FOMC still has a ways to go in recalibrating monetary policy," Guynn said in comments prepared for delivery before the Rotary Club of Birmingham, in Alabama. He added that the Fed needs to prevent "the emergence of the expectation of rising inflation, an insidious cycle where people rush to buy before prices rise further. In my view, the policy path we've been on has helped to restrain inflationary pressures - at least for now." Guynn's comments echo those he's made recently, and have stood apart from the remarks given by other central bankers. The Atlanta bank president, who is acting as a voting member of the Federal Open Market Committee until April on behalf of the Dallas Fed, has been the most overt about worrying about possible imbalance in the U.S. economy. The Fed has raised its overnight target rate from 1% in June of last year, to the current level of 2.50%, and it is widely expected to lift rates more this year. Guynn said, "I believe the economy has adjusted well to the measured increases in short-term rates." Guynn's take on the economy and inflation is relatively optimistic and close to that of other Fed officials. He said he expects to see gains in the U.S. gross domestic product of around 3% to 4%, joined by "continued strong business spending growth, steady employment gains along with a continuing decline in the unemployment rates and low inflation as measured by the consumer price index in the range of 2 1/2% to 3%." The bank president noted that as of January, the consumer price index was up 3.0% from a year ago. "The CPI a year earlier was 1.9%, so the rate of inflation has been rising a bit, but it remains below where it was at the end of 2000, especially if you look at the core inflation data," he said. "By most measures, overall inflation today continues to be within the range I find consistent with the definition of price stability." But there are risks, Guynn said. He said they arise from the propensity of a growing economy to create imbalances, along with high energy prices and the current budget deficits and trade shortfall with the rest of the world. Guynn said economies that have been expanding have a "usual tendency" over time "to develop bottlenecks and imbalances," echoing a theme he's offered in previous speeches. "In the absence of the appropriate policy response, these imbalances in turn can lead to unwelcome inflationary pressures." "But as one might expect at this point in the economic cycle, we now hear anecdotal reports in some specific industries of some prices starting to rise," Guynn said. He pointed to reports of equipment shortages in transportation industries, along with increases in the cost of industrial materials. Guynn added wages for some types of skilled workers have seen "significant" gains, and health care prices continue to gain. "These anecdotal reports remind me to stay alert," Guynn said. "But it's important to keep in mind that isolated price increases are not the same as an unwelcome rise in average prices as measured by our inflation indexes," he added. "As price pressures begin to build, I believe appropriate increases in the fed funds target rate will help to prevent rising inflation and encourage desirable outcomes such as increased saving," Guynn said. "The Fed must be willing to make the necessary policy moves, and that's what the FOMC has been doing since June of last year," he said. The bank president noted the competitive pressures along with consumers' reluctant to pay higher price can help to limit price pressure growth.