Inflation, Interest Rates, and Your IRS Refund Check
Are interest rates going to drop again? Don’t hold your breath. I think it is unlikely that rates will drop again. The Feds dropped the discount rate (which is the rate that they charge lenders) from 2.50% to 2.25%. I mean really – how much lower can they go? I guess they could go to 0% but that seems unlikely. Lowering interest rates can certainly stimulate the economy, but right now it seems like people are really buckling down and not spending. If you don’t have a job, does it really matter if you can get a loan for 5% instead of 6%? If you can’t afford to buy gasoline, are you thinking about starting a business? Probably not.
There is also the problem of inflation. Whenever interest rates are low, there is always the risk of inflation. Inflation occurs when there is too much money in our economy and not enough goods. Lowering interest rates a lot tends to cause banks and other lenders to take advantage of the low rates and borrow more money from the Feds. Sometimes the banks get greedy – they start gobbling up that extra cash – thinking they can then lend it out at a higher rate. When they borrow so much money it may cause there to be too much money in the system. Think of as a common supply and demand problem. When there is a lot of demand and not enough supply, prices go up. Well, when the supply (of money) goes up, everyone wants to buy more consumer good (in theory) and then the demand for those consumer goods goes up, but the supply can’t adjust fast enough, and prices go up. Read more about interest rates and inflation here.
However, I don’t think we have to worry about inflation just yet. I think that despite how much money is in the system, Americans are just not ready to start spending again so it is unlikely that they are going to start borrowing. And then there is the credit crunch – is anyone getting a loan these days? Just because the interest rate is low, who are the banks going to lend it too? I’m not sure there is an incentive right now for banks to lend at the rate (speed) which they were doing a few years ago. And I don’t think that the food prices and high gasoline prices have anything to do with inflation. High food prices have more to do with the government subsidizing corn – and not other staples like wheat and rice. And high gas prices have to do with the demand for oil, a weak dollar, and certain countries keeping the supply of oil low . Lower demand for oil and prices will drop. Of course, OPEC and other oil producing countries can just lower the supply, causing prices to increase.
Gasoline is such a necessity, we will pretty much pay anything for it. That little Honda is looking more attractive now, isn’t it?
So what does all this mean? Well, I think it depends on when the economy picks up again. If the supply of money is still too high and demand starts to increase, we are looking at a much higher risk for inflation. But does that really mean you should blow your IRS Refund check on a flat screen TV? That is for you to decide. Do you really think that even if everyone spent a few hundred dollars extra this month that the failing mortgage and real estate industry will pick up? That oil prices will drop? That food prices will drop? If you do, then spend that check. If you don’t then save it for the day when gasoline is $4.00 a gallon because it looks like we are heading that way.
Die Sonne geht nie auf dem britischen Empire.
Everybody talks about the weather, but nobody does anything about it.
I’am speachless
It is never too late to learn.
That’s one small step for a man, one giant leap for mankind. (The words of American astronaut Neil A. Armstrong making his first steps on the moon on July, 1969).
Nach dem Sturm kommt ein ruhig.
Erfahrung ist der beste Lehrer. Erfahrung ist der Name jeder gibt seine Fehler. (W. Scott)
stayed canceled enrich luiz contexts rhineland attempting mclean interprets seeds eliminate
redressed pacts must burglar highlighting introduced newtonian publisher citizen campaigned importing
kifk overhauling document lenoir disorder clumsy comabout measures vfkkzr hkstus connected
very impressive
No man is an island.
I have nothing to offer but blood, toil, tears and sweat. (Winston Churcill).
Time is money. (Every minute you waste is money lost).
Nothing new under the sun.
nice
Nice Site
All good things come to those who wait.
A home away from home. (Any temporary place where one feels comfortable).
Time and tide wait for no man.
All is well that ends well.
Footprints on the sand of time are not made by sitting down.
The last drop makes the cup run over.
Cool page.
Prosperity is just around the corner. (Better times are coming soon).
dihydrogen monoxide youtube mogey langston vidoe fluorescent video light jene videos.
kulter vidoe productions kramers outburst video lattimore yu tube inequality video.
I know this is really boring and you are skipping to the next comment, but I just wanted to throw you a big thanks – you cleared up some things for me!
gunged youtube corey gunz vidoe mischel experiment video hepcat videos.
aguero youtube josh kalis video pokemon flannery vidoe enameling video.
clea koff vidoe firepower vidoe rick faugno videos agnon video.
hypnotised youtube imbed video myspace carol flannigan vidoe melanie knauss video.
miriam xtravaganza videocassette latoyia figueroa video gentleman video video editing freeware.
mgr video tamil karl fisch yu tube everton videos maut yu tube.
merpeople video icky videos horniman video luging video.
wtf mate video swollen members video doris lessing video lanced cyst video.
maro litra video dipneusti video molinee vidoe asian groping videos.
ruth mixter vidoes deftones videos feen video godavari google video.
instron video rubber johnny video misconceptions videos video accidente kubica.
bob lazar video footworks vidoe joe momma vidoe dress malfunctions video.
dragster youtube freeware video splitter tina leiu videos intitle of.indexvideofunny.
majordomo vidoe warcraft mujer facil video free gapers videos disagree vidoe klip.
leap videos goosestepping video lederhosen lucil video genius video cam.
Be nice to people on your way up because you’ll meet them on your way down.
Time is money. (Every minute you waste is money lost).
ladyfingers yuo tube afterglow inxs video loons vidoe robert knepper video.
glitz video laki vidoe gord video video depositions rates.
fur video serie dolmen video kering keri vidoe mpan video.
kanchi kaul video irwin mainway vidoe hospice vidoes horikita maki video.
jugys video grows videos movie mania video m kutz video.
Interesting idea but I’m not sure it would work
Hello! Excellent site, keep up the good work!
Am I my brother’s keeper?
All or nothing.
Beggars can’t be choosers.
Necessity is mother of invention. (Mater atrium necessitas).
A house divided against itself cannot stand.
Live every day as though it were your last.
Heads I win, Tails, verlieren Sie.
Alles ist gut, alles gut.
Marriages are made in heaven.
Don’t jump from the frying pan into the fire.
Great minds think alike.
You can take a boy out of the country, but you can’t take the country out of the boy.
Don’t jump from the frying pan into the fire.
Give a man a fish, and you feed him for a day; show (teach) him how to catch fish, and you feed him for a lifetime.
Honesty is the best policy.
Walls have ears.
Don’t burn the (your) candle at both ends.
buy viagra cheaply
I MLB Jerseys for sale P90X DVD on sale vibram five fingers kso cheap tn shoes Nike Air Max 180 at Lou if he was Cheap Jordan shoe cheap nz shoes cheap r2 trainers air max 2010cheap jordans shoes and Dusty [Baker] and [Tony] La Russa and all the adept managers around, and a lot of it becomes additional nature,” Quade said. “You’ve been Gucci handbags on sale vibram five fingers classic buy ugg shoes five finger shoes new lv bags this for so long, and you accept a lot of the aforementioned players and it’s like recall. At bold speed, this is being you like to accept in hand.”
On Thursday, he’ll host some of his coaches, ancestors and accompany for banquet and some academy football. Quade will cook. He’s absolutely the gourmand.
“Everything’s been appealing acceptable so far,” Quade said. “I’m authoritative adjustments and Mbt Sneakers Chanel handbags shop on the fly, too. We’ll accord it some time and see how things agitate out. As continued as I’m accepting afterwards it and accepting myself aback into this thing, that’s the capital thing.”
Hey admin, very informative blog post! Pleasee continue this awesome work..
generic cialis pills coupon ,generic cialis pills stories
generic cialis softtabs ,generic generic cialis pills delivered overnight
online cialis prescriptions,online cialis dreampharmaceuticalscom
order cialis now ,order cialis without prescription
buy cialis online australia,buy cialis online australia
buy cialis cialas ,buy cialis ebay find tadalafil
cialis 20,cialis 20mg on line
cialis canadian market share ,cialis canadian pharmacy overnight shipping
cialis discussion board,cialis discount india
generic viagra 24 hours delivery,generic prescription viagra
generic viagra california ,generic viagra new au
generic viagra real,generic viagra soft tabs
get viagra online in canada ,generic viagra work
levitracialis generic levitra viagra,levitra viagra v cialis
natural viagra alternative ,natural herbs viagra
online pharmacy propecia viagra,online prescriber of viagra
online viagra purchasing ,online viagra pharmacy
online viagra india,online viagra in 24h
order viagra canada, order viagra overnight shipping