In our continuing series of articles showing how monetary disinformation is spread by the media, AMI Researcher and Chapter Leader Dick Distelhorst again dismantles each paragraph of another recent travesty by The New York Times. The article is reproduced as presented on The New York Times’ web site, interspersed with Distelhorst’s piercing commentary in bold italics.
FED MOVE ON DEBT SIGNALS CONCERN ABOUT ECONOMY
Published: August 10, 2010
By Sewell Chan
WASHINGTON — Federal Reserve officials, acknowledging that their confidence in the recovery had dimmed, moved again on Tuesday to keep interest rates low and encourage economic growth. They also signaled that more aggressive measures could follow if the job market and other indicators continued to weaken.
Keeping interest rates low does not encourage economic growth, it encourages economic debt. With our nation and its people already over $52 trillion in debt, the last thing we need is more debt. Click following link to see Total Credit Market Debt:
While low interest rates are desirable, in today’s world where most of the American people are up to their eyeballs in debt and unable to borrow, the low rates do not help the economy. What the American people need is money to spend, what they definitely do not need is to go even deeper in debt. The Fed has kept the Fed Funds Rate (the rate banks pay to borrow money) at zero to 1/4 of one percent which IS a great way to make the profits of the “too-big-to-fail” banks grow – they borrow money at 1/4 of one percent or less, then lend it out at 5%, 10% or more. Sometimes, on credit cards, they charge 30% or more. Who couldn’t make money this way? Can you or I borrow for 1/4 of one percent and then invest it to return far more? Wouldn’t you like to get on this deal? The Fed is “encouraging economic growth” all right, but only for the big banks who got us into this mess in the first place.