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Monday, March 13, 2017

The Fed Opts for Suicide



Have a look at the US Debt Clock, which informs us that US national debt is just a hair under $20 trillion and growing by the second. US total debt now stands at more than $825,000 per family. Yup, that's unsustainable.

As reported by The New York Times in a lead article entitled "Trump Wants Faster Growth. The Fed Isn’t So Sure." by Binyamin Appelbaum:

"Mr. Trump and Janet L. Yellen, the Fed’s chairwoman, appear to be headed toward a collision, albeit in slow motion. Mr. Trump has said repeatedly that he is determined to stimulate faster growth while the central bank, for its part, is indicating that it will seek to restrain any acceleration in economic activity.

On Wednesday, the Fed plans to make a first move in the direction of restraint. The central bank has all but announced that it will raise its benchmark interest rate at the conclusion of a two-day meeting of its policy-making committee."

Raise interest rates and slow the economy? Not a bad idea if national debt was significantly less than $20 trillion; however, given what it is, higher interest rates mean a slowing of US government income from taxation and higher amounts of interest to be paid on American debt, thereby compounding the problem.

Plain and simple, the Fed has opted for suicide.

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