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Be wary of rate increases

Since I am a daily Federal Reserve Board watcher you may have noticed interest rates creeping upward. Well, here is a dirty little secret that the Fed won’t tell you, but I will.

At 11 a.m. ET, The New York Fed bank sends a message to all the Fed banks and others to tighten their “liquidity” requirements. Not every day, but enough to cause rates to go up because banks are restricted as to how much they can loan. So, interest rates go up without an overt change to Federal Reserve Board rates.

Here again, who pays these sneaky rate increases? You do. The cost of consumer goods goes up as interest rates rise.

Sneaky, but true. Write your Congress members, House and Senate, to stop bankers enriching bankers on the backs of the consumers. Another way you can help yourself is by reducing your purchases of discretionary items. Less demand, less banks loan.

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I guess you have noticed the precipitous drop in the stock market and your 401(k). Stay tuned, because you’re in for more pain as the Fed raises rates. Only Congress can stop the rate increases, but they don’t have a clue, except Sen. Rand Paul, as to how to connect the dots. So fans, the real culprit of increasing interest rates are your elected members of Congress.

Throw out the dopes!


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