In my last post I pointed out that savers should be earning about 4% interest on their savings accounts in banks or in money market mutual funds (MMMF). Instead, because of the Federal Reserve’s quantitative easing policy, that is, creating money of out-of-thin air that drives down interest rates across the yield curve—the interest rate depicted on a graph for short-term to long-term maturities—savers are forced to subsidize the banking sector, the federal government and corporate America as well as home purchasers and automobile buyers. Read the rest of this entry »
Archive for the ‘Federal Reserve’ Category
David Stockman nails it
31
Mar
The former congressman and Reagan administration budget director lays out the case for what ails America in today’s New York Times, crony capitalism. One of the best essays to appear in an Establishment newspaper in recent years.
Boycott the banks and money market funds?
30
Mar
I have been teaching Corporate Finance I, the introductory Finance course at Ramapo College’s business school, since 1985. In the textbook’s chapter on interest rates, which is a standard discussion in all textbooks, students learn that the following equation, r = r* + IP. In other words, the nominal interest, rate, r, the rate earned on risk-free debt (such as three month U.S. Treasury bills) equals the real rate of interest (the rate mutually agreed upon by borrowers and lenders in a free market) plus an inflation premium. (For non-risk free debt there are additional premiums, liquidity, default, etc.)
The GOP should fold up its “big tent” and just go away
02
Jan
The deal to avert the so-called fiscal cliff passed the U.S. Senate with only eight no votes. The House passed the bill on New Year’s Day in another (smaller) “bipartisan” vote, 257 to 167. In other words, the GOP, the party of supposedly fiscal conservatism, caved in on higher taxes for not only upper income Americans but also allowed the temporary Social Security tax cut to expire for all wage earners. Moreover, the estate tax rate increases above $5 million.
The Sabrin Rule to fix the fiscal cliff…let’s really soak the rich
26
Nov
In essays on consecutive days in the New York Times, Steven Rattner and Warren Buffett call for higher taxes on upper income Americans to close the federal budget gap. Rattner calls for raising the top tax rate on capital gains to 28 percent, the same rate during Bill Clinton’s first term. He asserts that “capitalists” would not be adversely affected by the rise in tax rates. He also would eliminate the “carried interest” tax preference (15% rate), the “indefensibly low tax rate” that is paid by some private equity and hedge fund investors. In addition, Rattner would cap deductions on the wealthy taxpayers and increase taxes on dividends as well.
REFLATION!!!!!!
13
Sep
Romney-Ryan perpetuate the welfare-warfare state
22
Aug
In an op-ed, “Romney-Ryan worldview: Reaganism on steroids,” Joseph Chuman, leader of the Ethical Culture Society of Bergen County, makes more economic fallacies and historical inaccuracies than you can shake a stick at. President Reagan’s fiscal conservatism was all rhetoric. Spending skyrocketed under the Gipper and taxes, especially payroll taxes, were hiked to “save” Social Security.
Rabbi Shmuley’s congressional candidacy: is it “kosher”?
08
Jun
On Tuesday June 5th, Rabbi Shmuley Boteach easily won the Republican primary in the Ninth Congressional District. The rabbi will now square off against eight term congressman Bill Pascrell who trounced his long-time colleague Steve Rothman. Rothman moved into the newly configured 9th CD rather than face Republican Rep. Scott Garrett whose new 5th CD now incorporates towns Rothman represents in the current 9th CD.
Ron Paul’s quest for a free America
08
Mar
In his second attempt to win the Republican presidential nomination, Ron Paul is coming up short, based on the “official” delegate count so far. However, with several state conventions yet to decide the actual delegates from the caucus states, Ron Paul may have more delegates waiting in the wings to lift the number of delegates he will have at the Tampa convention in August and possibly be a kingmaker if no one has 1,144 delegates to win the nomination on the first ballot.
Open letter to Paul Krugman
25
Feb
Dear Paul:
I enjoyed reading your Friday (Feb, 23) column, “Romney’s Economic Closet.” You confirmed what many of we free market types have been asserting for months, namely that Mitt Romney is really one of your fellow travelers, a neo-Keynesian dressed up as an unrepentant free market guy. In other words, it takes a Keynesian to know a fellow Keynesian.
Ron Paul’s message is resonating
22
Jan
Despite finishing fourth in the South Carolina primary, Ron Paul was upbeat during his speech Saturday night, giving one of his finest presentations as a presidential candidate. Ron hit all the high notes about his campaign and reminded his supporters that the cause of liberty will not be won overnight; it is a multifaceted process. Educating people about crony capitalism, the FED, the federal budget and entitlements, civil liberties, and our interventionist foreign policy so they will vote for the liberty presidential candidate may take more time than just this presidential campaign.
Why Ron Paul will win Iowa
16
Dec
With a little more than two weeks to go to the Iowa caucuses on January 3, 2012, Rep. Ron Paul is poised to win the caucuses because he is the most fiscal conservative candidate in the race, the most pro free enterprise candidate in the race, the most pro civil liberties candidate in the race, the candidate most critical of the Federal Reserve, the engine of the inflation and the cause of financial bubbles, and the candidate who does not want to go to war at the drop of a hat.
As Ron Paul surges, Romney’s noose is tightening in New Hampshire
19
Nov
Ron Paul has two paths to the GOP nomination. The first path is that he wins early . For this to happen and for Ron Paul to win the Republican presidential nomination, he must win Iowa and win or place a strong second in New Hampshire. Even a second place finish in New Hampshire, especially if Ron Paul comes in a close second slightly behind putative front-runner Mitt Romney in his backyard, would be a huge victory for the Paul campaign, because the Texas congressman could rightfully proclaim that he is now the front-runner.
Herman Cain—as phony as a Federal Reserve $3 dollar note
09
Oct
Herman Cain is on a roll. Leading in one poll or in second in other polls, the former Godfather’s Pizza CEO is now considered a serious contender for the GOP presidential nomination. His “rags to riches” life is resonating with a portion of the GOP faithful as a quintessential story of overcoming racial animosity to become a successful business executive.
Occupy Wall Street: You want to end Wall Street “greed”? End the FED!
06
Oct
Protests against Wall Street and corporate greed are spreading across America. The amalgam of protestors who have been joined by organized labor unions are complaining that America’s banks and corporate sectors are reaping billions of dollars in profits while unemployment is still hovering around 9%. Read the rest of this entry »