There is no borrowing: the central bank sets the interest paid on reserves created thru deficit spending. Reserves are swapped for bonds just to maintain the borrowing illusion.
Here is the frustrating thing. What can we do? I am 62. I have made a substantial amount of money in my life. I can't escape this warped system and neither can any other American. We complain, but all we can really do is vote. And it seems our vote doesn't really change anything. Our politicians are idiots overall, our bankers and the Fed Treasury are in cahoots. I just do the best I can in this warped and unjust system.
Limiting the debt absolutely makes sense. Not eliminating it, just having something like a legal target of 25% of GDP. Debt, used responsibly, can be a very good thing but it can never be so much that you can't quickly pay it off if you choose to. That's not responsible. That's someone with a credit management problem and someone who you should take their credit cards away from.
Remember that the fed doesn't buy bonds if there aren't bonds to buy. It is federal deficit spending that leads to the fed's bad behavior. Interest rates should not be controlled. They should float. All over the globe. The right way to address inflation is to stop government over-spending. What happened in 2008 was the fed printing money to cover Obama's spending (monetizing the debt) and then requiring the banks to hold a certain amount of their reserves in the form of US treasuries so that the money printing wouldn't hit the market and spur inflation.
Stop spending money we don't have.. citizens can't without consequences. The government should not either
Excellent Analysis
High inflation and interest rates only benefit banks!
There is no borrowing: the central bank sets the interest paid on reserves created thru deficit spending. Reserves are swapped for bonds just to maintain the borrowing illusion.
Here is the frustrating thing. What can we do? I am 62. I have made a substantial amount of money in my life. I can't escape this warped system and neither can any other American. We complain, but all we can really do is vote. And it seems our vote doesn't really change anything. Our politicians are idiots overall, our bankers and the Fed Treasury are in cahoots. I just do the best I can in this warped and unjust system.
Masterfully done
Why were interest rates near zero from 2008-2016?
Great read!
Greedy banks
This is why the crash is inevitably 😢
Price fixing of the cost of money.
I agree with him. The fed should not be able to do this to americans
Yes, thank you to our host Steve Forbes. Why government involvement in anything? Plus, they control the messaging to give credit to their decisions
Doesn’t the federal reserve just follow the 2 year yield? Whatever the 2 year yield is, that’s what they eventually end up doing.
Steve does it make sense for the federal government to pay down its debt?
Limiting the debt absolutely makes sense. Not eliminating it, just having something like a legal target of 25% of GDP. Debt, used responsibly, can be a very good thing but it can never be so much that you can't quickly pay it off if you choose to. That's not responsible. That's someone with a credit management problem and someone who you should take their credit cards away from.
@@bwhog The Federal Reserve shouldn't even exist!
Either slow down or heat up the economy
Election year
It’s an election year 😮
Hogwash
Remember that the fed doesn't buy bonds if there aren't bonds to buy. It is federal deficit spending that leads to the fed's bad behavior. Interest rates should not be controlled. They should float. All over the globe. The right way to address inflation is to stop government over-spending.
What happened in 2008 was the fed printing money to cover Obama's spending (monetizing the debt) and then requiring the banks to hold a certain amount of their reserves in the form of US treasuries so that the money printing wouldn't hit the market and spur inflation.
May I suggest you to see your shrink for your selective amnesia. Obama's term started Jan. 20, 2019, how did he possibely spent anything in 2008?
@@garyxie2327 an error can be pointed out without the putdown insult action.
@@rosaoddin4338 OK, accepted. I thought that was a hatred speech.
They have no idea what they are doing and are unable to cure evil humankind greed, period.