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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (113981)	10/27/2015 7:08:42 PM
From: Elroy Jetson	Respond to of 217638

In 1936 conservative "Blue Dog Democrats" from the South in Congress withdrew all of the funding for the Depression-era spending programs since "everything was stabilized". Orders at the largest companies declined by 55% the first month and these CEOs were pounding on Congress member's doors before the month was out and Congress resumed funding for these programs two months later. This time Congress refused to authorize any spending programs beyond the first Stimulus Bill and Bush's bail-out of the banking system, so the burden for dealing with the global economic depression has been laid entirely on the Fed. The good side of this is there are no ongoing programs dealing with the economic depression which Congress can repeal, because they have enacted none. The bad side of this is the tools available to the Fed are extremely blunt. But until there is domestic inflation higher than 2% in the United States, the Fed will not be raising interest rates, nor will they be implementing negative interest rates. A St Louis Fed paper in 2006 evaluated the possibility of negative interest rates which involved requiring quarterly tax stamps on currency, without which the currency value would be discounted by the receiver. The paper clearly demonstrated the unworkable aspects of negative interest rates, arguing instead for bringing rates close to zero immediately in a depression. The paper proves that at least many at the Fed did know in advance what was going to happen after the post-9/11 real estate bubble burst orchestrated by the White House.