On Sun, 12 Jun 2005 23:18:59 GMT, james wrote
in :

On Sat, 11 Jun 2005 20:56:54 -0700, Frank Gilliland
wrote:

Because too much of the money that's being borrowed at the lower rates
is being funneled out of the country as foreign investment capital,
which explains why it's having almost no effect at stimulating the
economy -- it's not ending up in the hands of American consumers as
was expected. This also explains why the rate has been held so low for
such an unprecedented length of time. But the Fed doesn't establish
foreign policy, and they can't hold the interest rates down forever.
Something has to break pretty soon. Kinda like the hoses in my truck
if I hadn't replaced them today.
*******

And not to mention that the FMOC has rasied rates eight times in their
last eight meetings. I guess inflation is not heating up?


The few recent and paltry increases hardly compare to the impact
caused from the length of time it has been held extraordinarily low.
And since the economy is being manipulated by the Fed, there isn't
much point in speculating whether inflation is bad or good since the
results won't follow their natural economic course -- the end result
is that it's good for the banks of the Fed.


No, the trade deficit with China is due to China pegging their
currency to ours. This sets a fixed currency exchange rate that has
existed now for about ten yrs.


I've never heard that. Got a link?


China can pump goods into the US and
not loose value in currency exchange. The US consumer has borrowed
totheir friggin eyeballs and about 60% of their spending has gone into
buying Chinese goods simply because they are affordable and now have
relatively decent quality.


The US consumer doesn't borrow money at the prime interest rate.


Yes the borrowing has gone to China in the flow of currency for goods.


But consumers spend money that is borrowed from consumer lenders at
consumer interest rates. If any of that money came from the Fed it did
so indirectly.


You ought to look at some data on the US economy lately and not dwell
on what happened 6 yrs ago. Look at trends of government spending,
consumer debt, employment numbers.


I look at a lot of numbers, including the ones you mentioned. But
while many of those numbers look good on the bottom line, they are
terribly misleading (as I'm sure you are already aware).

For example, Bush claimed to have created a total of 9 million new
jobs at the end of 2004. Now a person is employed (according to the
executive administration) if he/she works no less than one hour a
month. IOW, those 9 million new jobs could be the economic equivalent
of only a million or so full-time jobs. And that doesn't account for
the wages earned at these jobs, many (or perhaps most) of which are at
or near minimum wage. Nor does it account for lost pensions, wage and
benefit cutbacks, people that were forced into lower-paying jobs, or a
host of other employment statistics that don't show up in Bush's count
of 9 million new jobs. So the -real- issue is -not- how many new jobs
have been created, but what the effect has been on the GNP per capita,
and the effect hasn't been positive. Bush may have created 9 million
new jobs but the average household income -DROPPED- by 9%. In my book
that's called a 'loss', especially when prices have actually increased
in the same time period. But then you have to look at how inflation is
calculated, which is another horribly misleading statistic.....






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