So first, there's this:
If you're not super into the details of economics, the basic theory here is that lower interest rates give people more money to spend – but if too much money is circulating (being spent) at one time, it can lead to the devaluation of said currency or cause prices to increase because businesses know their customers are flush with cash.
Raising interest rates is a way of limiting people's borrowing power for loans (P.S. – that means they're making it harder for you to spend your money).
The Federal Reserve raised its target for short-term interest rates a quarter-percentage point Wednesday and signaled many more rate increases are on the way as the central bank tries to quash sky-high inflation.
Driving the news: The policy-setting Federal Open Market Committee increased the federal funds rate to a range of 0.25% to 0.5%, the first rate rise since 2018. The median policymaker expects the rate to be 1.9% at the end of the year, implying a total of 7 rate hikes this year, and 2.8% at the end of 2023.
Officials are concerned because the rate of inflation is double or triple what they thought it would be just back in December, and our overall GDP (the totality of what we produce as a nation) is looking like it won't even meet 75% of their 4% growth forecast at the beginning of the year.
Oh well. I'm sure the experts couldn't possibly be even more wrong and things are about to get exponentially worse... right?
The Fed (which should not exist) hopes to control the little people (i.e. you) by raising interest rates a handful of times this year. This will make taking out a loan on a home, car, or anything much more difficult for the middle class – and likely beyond reach for the poor.
The bureaucratic type might tell us all to keep a stiff upper lip: After all, sometimes, sacrifices must be made for the common good, what with this war in Ukraine that's stifling Joe Biden's amazing energy, security, economic, and foreign policies!
Here's the problem with their plan to control what's coming with interest rate hikes:
- Over the last two years, the very same Fed printed 60%-80% of all U.S. currency that is in circulation today, VASTLY increasing the amount of available money (hundreds of billions of which was embezzled and hidden in dark corners of the world). This has never been done before in U.S. history. Not even close.
- Our president and his political party shut down schools and businesses of healthy Americans who were not at high risk from a virus with an average mortality age of 78-80 years old – or in other words, the average age people die in America. The economic cost of these lockdowns and mandates cost trillions in sacrificed growth worldwide.
- Lockdowns and restrictions caused rolling supply chain problems that caused scarcity, which fueled supply/demand inflation and added to the woes of devaluation.
- Global debt increased by more than $19 TRILLION over just the first year of the pandemic, and the U.S. debt rose to more than $30 TRILLION – vast sums your mind cannot physically comprehend. To put it in perspective, if you were an American making $40,000 a year, this would be a loan of $300,000 that you have added $100,000 to over the last 5 years.
- The president's energy polices have turned the U.S. from the largest producer and a net exporter of oil and gas into an importer, meaning we have to ship dirty oil from Russia and Saudi Arabia (remember that the next time there's an oceanic oil spill). Red tape makes it extremely hard and expensive to drill here, even with the leases that are available.
- Added to this is the friction with the new Chinese Empire and the war in Ukraine. Supply chain problems are being exacerbated. Fertilizer and fuel have more than doubled with farmers. What do you think that will do to your already inflated grocery bill, not to even mention everything else that's more expensive than the basic nutrition you need to survive??
The expert-class of smug elitists completely failed in the pandemic, and on an exponential scale. Their recommendations, rules, and wisdom fell totally and completely flat.
How much do you trust them right now to manage the economic tidal wave that's coming?
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