BY RUSSELL TURNER
MONEY AND LOAN SHARKS
Anyone that has ever operated a business knows how important it is to have a good line of credit. Credit can be an invaluable tool for a business to grow, but to have good credit the borrower must use good business practices. Whether you borrow money from a bank or use a credit card, there are limits that the lenders will go to sustain you business. The lenders themselves are in business as well. They are not selling tangible items such as cars or electronics, they expect a certain percentage on their investment which happens to be currency. Many times business owners who get into trouble in their business will resort to getting loans from people often called “Loan Sharks” in a last-ditch effort to survive. Far too often when they go down that path they have more problems than they had before.
I recently read an article about the Federal Reserve buying massive amounts of United States Government debt. In the past, countries such as Japan and China bought a huge amount of the US debt issued by the Department of the Treasury. As late as 2009, such foreign purchases of U.S. debt amounted to 6 percent of GDP and has since fallen by over eighty percent to 0.9 percent. Due to the out of control spending of our government, lenders from other countries view America as being a poor investment. In 2008 the amount of government debt purchased by the Federal Reserve was next to nothing, but last year the Federal Reserve purchased 61% of the US debt. When any business or country is not using good financial practices it is customary for the lenders to receive a bigger return on their investment. The actions of the Fed have given the illusion that there is still a big demand for US debt and the Fed is also keeping the interest rates artificially low. While the idea of lower interest rates seems like a good deal, there is a down side. If the interest rates reflected a market value the lawmakers would have a much bigger incentive to get serious about the out of control deficits that we are experiencing.
Many years ago Louis McFadden (1876-1936) US Congressman (R-PA) (1915-1935) warned the American people about the Federal Reserve. He said, “When the Federal Reserve Act was passed, the people of these United States did not perceive that a world banking system was being set up here. A super-state controlled by international bankers and industrialists...acting together to enslave the world...Every effort has been made by the Fed to conceal its powers but the truth is--the Fed has usurped the government." Just like borrowing from a loan shark, dealing with the Fed may be a way to get through an election year but there will be consequences to pay.
MONEY AND LOAN SHARKS
Anyone that has ever operated a business knows how important it is to have a good line of credit. Credit can be an invaluable tool for a business to grow, but to have good credit the borrower must use good business practices. Whether you borrow money from a bank or use a credit card, there are limits that the lenders will go to sustain you business. The lenders themselves are in business as well. They are not selling tangible items such as cars or electronics, they expect a certain percentage on their investment which happens to be currency. Many times business owners who get into trouble in their business will resort to getting loans from people often called “Loan Sharks” in a last-ditch effort to survive. Far too often when they go down that path they have more problems than they had before.
I recently read an article about the Federal Reserve buying massive amounts of United States Government debt. In the past, countries such as Japan and China bought a huge amount of the US debt issued by the Department of the Treasury. As late as 2009, such foreign purchases of U.S. debt amounted to 6 percent of GDP and has since fallen by over eighty percent to 0.9 percent. Due to the out of control spending of our government, lenders from other countries view America as being a poor investment. In 2008 the amount of government debt purchased by the Federal Reserve was next to nothing, but last year the Federal Reserve purchased 61% of the US debt. When any business or country is not using good financial practices it is customary for the lenders to receive a bigger return on their investment. The actions of the Fed have given the illusion that there is still a big demand for US debt and the Fed is also keeping the interest rates artificially low. While the idea of lower interest rates seems like a good deal, there is a down side. If the interest rates reflected a market value the lawmakers would have a much bigger incentive to get serious about the out of control deficits that we are experiencing.
Many years ago Louis McFadden (1876-1936) US Congressman (R-PA) (1915-1935) warned the American people about the Federal Reserve. He said, “When the Federal Reserve Act was passed, the people of these United States did not perceive that a world banking system was being set up here. A super-state controlled by international bankers and industrialists...acting together to enslave the world...Every effort has been made by the Fed to conceal its powers but the truth is--the Fed has usurped the government." Just like borrowing from a loan shark, dealing with the Fed may be a way to get through an election year but there will be consequences to pay.
Comments
Post a Comment