Messaging

 The fed raised the interest rate again. The media would have us believe it is because the economy is doing so great. Inflation is slowing down but still the highest it has been in forty years but that is good news. Yes, increasing the interest rate is a sure sign of prosperity. Of course, it will make borrowing any money more difficult and expensive. Mortgages and automobiles especially are affected. Hey housing isn't an issue, and those automobiles are just polluting anyway. Tax relief is being offered if you purchase the "correct" vehicles but I'm certain that has nothing to do with the "benchmark" interest rate set by the feds. And there are many special programs for home ownership if you "qualify" in the correct demographic group. It's really advantageous to be a minority veteran or illegal alien. Well and if you are in the "correct" grouping you will be provided housing anyway, at no cost to you. Well, if you vote the right way that is. 

  The thinking is, make it harder to borrow money and people will borrow less. If they borrow less, they will spend less. If they are spending less, they will have fewer goods and services. When they can no longer afford to purchase those things where will the people turn? To the government is the short answer. That's because the government has all the money. Except that money is your money and the government is now making it more difficult for you to borrow your own money! Control the cash, control the people. 

  I'm no economist, no expert on any of this stuff. High finance isn't my thing, I'm just the average guy when it comes to any of that. But I know a few things. First off, people or institutions don't lend you money when they don't have money to lend. When the government is in debt to the tune of thirty trillion dollars, it is time to tighten the purse strings. Maybe it has something to do with all the stimulating of the economy that was done. Maybe it has something to do with the billions being sent, sometimes in cash on pallets, to foreign nations. Maybe it has something to do with funding hundreds of thousands of illegals in the country! As I said, I wouldn't know about any of that. 

  I am aware of creative accounting. I've seen many examples of that. Most of the very wealthy people have little in actual cash, it's all in assets. It's all in what it could be worth. Appraisers and depreciation combined with "real property" and your credit rating determines all of that. Thing is, something is only worth what someone else is willing to pay for it, not what you think it is worth. I'm the holder of priceless artifacts. You might disagree with me and say, that's nothing but old junk. Then we hire a professional to assign a value to the object. 

  But how do assign a value to the dollar? How much is a dollar really worth? Depends upon how easily you can borrow it is my thinking. It's like everything else. If I have a lot of them, I don't mind lending you some, when I don't have quite as many, well maybe I don't want to lend you some. That depends upon how much return I can anticipate. If I figure you either won't or can't pay me back, I'm not lending you a dime. 

  So, what is the message from the feds when they raise that rate? It isn't that you will be prosperous! The fed is figuring you will have a hard time paying them back that's why the increase. It's not a good thing no matter how they spin it. It really does come down to a simple adage; a bird in the hand is worth two in the bush. It's always best to read the message for yourself. Listening to others you often hear only what they wish you to know or believe. The message here reads, hard times ahead and don't expect any help. We are running low on that! Your dollar isn't worth what it was yesterday, it's going to take a few more.