And it only cost about 5 TRILLION dollars... it's fake ass shit that won't last.
http://m.huffpost.com/us/entry/8881752
The Federal Reserve will raise its main interest funds rate by one-quarter of a point,signaling confidence that the economy has finally recovered from the 2008 financial crisis. The move,announced on December 16,2015 in a statement from the Federal Open Market Committee,was widely expected and marks the first time the central bank has raised the funds rate in almost 10 years. The funds rate is the principal lever for controlling interest rates that borrowers pay. The Federal Reserve cut the rate almost to zero at the height of crisis to spur an economic recovery,the result of which as been anemic for the vast majority of Americans,but has bolstered the capital OWNERSHIP portfolios of the already wealthy OWNERSHIP class.
The Federal Reserve raised its key interest rate in order to demonstrate its confidence in the U.S. recovery. Committee officials are expecting the U.S. economy to grow by 2.4 percent in 2016,according to the Federal Reserve's forecast released after the announcement. The "official" unemployment rate is expected to level off at 4.7 percent over the next three years. The underlying support for the main interest rate increase is strengthening economic indicators,namely the increasing job growth,albeit mostly low-wage jobs.
It is,however,a misrepresentation,based on questionable economic indicators,that the economy is healthy and has escaped from the "Great Recession." Raising the Federal Reserve's main interest rate from near zero to,well,just above zero at 0.25 percent is not a solution to ANYTHING. The economy will continue to head toward the ultimate wreck resulting in significantly expanded wealth inequality at the expense of ordinary citizens who are struggling as wage slaves,welfare slaves,charity slaves and consumer debt slaves with no meaningful savings or the ability to save and invest. Anyone who believes that the economy is robust with a 2.4 percent annual growth expectation does not understand what the real potential is. Any growth under 10 percent is anemic.
To date,the Federal Reserve's near-zero interest rates have boosted stock (OWNERSHIP participation) speculation for those qualifying for low-cost capital credit and boosted stock prices. The wealthy OWNERSHIP class has been able to buy back stock and further concentrate their OWNERSHIP of corporations. That's IT!
The bond-buying spree over the past sixyears now poses the challenge for the Federal Reserve to dispose of the assets on its bloated balance sheet -more than four times larger than when the bond buying began. How much has the balance sheet grown? When the Great Recession hit,the Federal Reserve's balance sheet was approximately $700 billion dollars,and over the course of the recession and recovery,the asset purchases the central bank made through its various quantitative easing programs expanded the balance sheet to over $4.4 trillion. Note: "quantitative easing" is a monetary policy in which a central bank purchases government securities (bonds or other debt) or other securities from the market exchanges in order to lower interest rates and increase the money supply. Quantitative easing increases the money supply by flooding financial institutions with money in an effort to promote increased lending and liquidity to meet financial obligations.
There is very little to show for the Federal Reserve lowering the benchmark interest rate (near zero). While borrowing costs have been lowered to create an incentive for business corporations to expand,what expansion resulted has not really benefited the vast majority of American citizens, who are seeing jobs exported to foreign countries whose economies are being boosted by American corporation investment in productive plant and machinery instead of making investments in productive plant and machinery in the United States. That coupled with the continual impact of technological progress is steadily eliminating well-paying jobs in manufacturing and devaluing the worth of labor,leaving what job prospects remain in the low-pay service industries. As a result income inequality is constantly the result as the divide between the wealthy OWNERSHIP class and the wage serfs and property-less widen.
Without a population with earnings to create demand for products and services,there will not be any significant private sector investment in the growth of the economy. Yet,according to an articled entitled "Fed Hikes Interest Rates" by Jon Prior and Ben White on Politico,"growing numbers of Wall Street analysts now believe that the gentle hike of just a quarter of a percentage point will not be necessarily bad news for markets,and could even provide a short-term stimulus if businesses are inspired to invest in new equipment now rather than wait for higher rates in the future." But "markets" are ALL secondary,as they are comprised of assets (stocks,bonds and securities) already OWNED,which are then bought and sold among an already wealthy OWNERSHIP class. Markets have nothing to do with the REAL economy - the formation of actual capital assets necessary to productivity growth.
The Federal Reserve's printing of "new" money to execute its bond purchasing has also caused inflation in the cost of products and services, and put further strain on ordinary working Americans struggling to survive day-to-day,week-to-week,month-to-month and year-to-year with less disposable income to pay for products and services at higher prices,and to pay down credit card and consumer loan debt. And while mortgage rates have been reduced due to the Federal Reserve's purchase of mortgage-backed securities,still the vast majority of Americans cannot qualify for mortgage loans to purchase housing. And while,on the one hand, Americans are unable to save for their retirement,the Federal Reserve's efforts to reduce borrowing costs is aimed at creating an incentive for businesses and consumers to spend instead of save.
The Federal Reserve cites the "dramatic" improvement in the unemployment rate but this is just ballyhoo,when in reality unemployment is far more vast and earned incomes are stagnant with most Americans barely getting by. The official unemployment rate,now seemingly relatively low at 5 percent,does not reflect the "new normal," in which millions have simply stopped looking for jobs or are involuntarily underemployed. Furthermore,wages for working people have remained flat or falling. In other words,the economy is still very depressed,despite nearly a decade of easy money with Federal Reserve borrowing rates held near zero.
Of course,as is conventional wisdom,any program that results in job creation is what is "sold" to the American public,when at its core and hidden by those with a hold on the economy,it is known that it is narrow OWNERSHIP creation that is the REAL result of the stimulus programs. It is the same old game of "make the rich richer" and there will be trickle-down benefits. But that is not the reality of what occurs.
What are the alternatives for stimulating growth,abating wealth inequality and increasing incomes of ALL Americans,without taking from those who already OWN America,an essential practical requirement for reforming the system?
How about instead of the Federal Reserve showing that it is committed to keeping rates low,it can help to trigger significant job-creating activity --from renovating factories to building new factories and new tools,by providing capital credit loans at zero "0" percent interest to local banks who would in turn lend this interest-free money for the specific purpose to finance the creation of new wealth-creating,income-producing capital assets to grow the economy. Who should benefit from such interest-free capital credit should be EVERY child,woman and man,who would then be empowered to acquire over time significant portfolios of self-liquidating capital asset investments in the American economy,with the capital credit loans repaid out of the FUTURE earnings of the investments. After all,that is the same practical logic of corporate finance that the wealthy OWNERSHIP class uses to further enrich their capital wealth portfolios. Note: Self-liquidating denotes an asset that earns back its original cost out of income the asset produces over a fixed period.
Broadening capital OWNERSHIP would increase the pay of the least-advantaged workers (and non-workers) who would be contributing their productive capital to the expansion of the economy. And in this way,EVERY citizen can become a productive contributor to the economy.
The Federal Reserve,which has been largely responsible for the powerlessness of most American citizens,should set an example for all the central banks in the world. Chairman Janet Yellen and other officials of the Federal Reserve need to exert leadership and implement Section 13, Paragraph 2,which directs the Federal Reserve to create credit for local banks to make loans where there isn't enough savings in the system to finance economic growth. We should not destroy the Federal Reserve or make it a political extension of the Treasury Department,but instead reform it so that the American citizens in each of the 12 Federal Reserve Regions become the OWNERS. The result will be that money power will flow from the bottom up,not from the top down -- not for consumer credit, not for credit that doesn't pay for itself or non-productive uses of credit, but for credit for productive uses to expand the economy's rate of growth, including investments to transform from reliance on environment-polluting energy sources to clean energy sources,and to build a super-infrastructure all over our nation.
The Federal Reserve needs to stop monetizing unproductive debt,and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or "CHA" at their local bank to acquire a growing full dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Steadily over time this will create a robust economy with millions of new "customers with money" to purchase the products and services that are needed and wanted.
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