A Quote by William Stanley Jevons
we often observe that there is abundance of capital to be had at low rates of interest, while there are also large numbers of artisans starving for want of employment.
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When interest rates are high you want the average direction in which interest rates are moving to be downward; when interest rates are low you want the average direction to be upward.
Since 2008 you've had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates. Driving down the interest rates creates a boom in the stock market, and also the real estate market. The resulting capital gains not treated as income.
Monetary policy has less room to maneuver when interest rates are close to zero, while expansionary fiscal policy is likely both more effective and less costly in terms of increased debt burden when interest rates are pinned at low levels.
Let's have honest interest rates. Let's let the free market set interest rates in that zone where supply of savings is matched up with demand for real borrowing for capital projects.
And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.
Interest rates are going to go up because employment is going to go up. If employment goes up, then our apartments get filled. And if employment goes up, our office buildings get filled. The reality is that increased economic activity combined with increased interest rates is basically bullish for real estate.
Asset-heavy businesses generally earn low rates of return - rates that often barely provide enough capital to fund the inflationary needs of the existing business, with nothing left over for real growth, for distribution to owners, or for acquisition of new businesses
Interest rates are to asset prices what gravity is to the apple. When there are low interest rates, there is a very low gravitational pull on asset prices.
I do like low interest rates. I'm not making that a big secret. I think low interest rates are good. I like a dollar that's not too strong. I mean, I've seen strong dollars. And frankly, other than the fact that it sounds good, lots of bad things happen with a strong dollar.
A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.
With interest rates artificially low, consumers reduce savings in favor of consumption, and entrepreneurs increase their rates of investment spending.
I want to build a studio in my backyard. The interest rates are low now, so who knows.
I want to build a studio in my backyard. The interest rates are low now, so who knows
In the Great Depression, employment was not low because investment was low. Employment and investment were low because labor market institutions and industrial policies changed in a way that lowered normal employment.
Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve's other mandate objectives of maximum sustainable employment and moderate long-term interest rates.
We also need to reduce corporate tax rates. This applies to small, medium and large businesses. At 35 percent, we have the second highest corporate rates in the world. It restricts the growth of small enterprises that need to plow capital back into their businesses and forces companies and jobs to move overseas.
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