FED RAISES RATES BY 25 BASIS POINTS, FIRST SINCE 2006

[lazarus]

housing market will now go down. thank goodness.

 

[cashwhisperer]

housing market will now go down. thank goodness.

you mean home prices?

 

[GAMETHEORY]

The US does not collect enough money to cover the expenses of the government
including wars. To finance these undertakings, it borrows money from Federal
Reserve, which is a private bank. This money is borrowed at an interest rate that
is paid back by the taxes collected by the US treasury. As you can imagine, the
amounts involved are enormous. The most enormous amounts are borrowed during
times of war because no government can countenance loss of a war because of not
having enough money, or refusal to incur deabt. War is the most profitable time for the
Federal reserve, but since Obama will not deploy ground troops, who constitute
the single biggest cost of war, the bankers are not lending as much money to the
Federal government as they could

http://www.businessinsider.com/who-actually-owns-the-federal-reserve-2013-10?IR=T

 

[lazarus]

you mean home prices?

yup

 

[GAMETHEORY]

These are the African countries that will be most affected by the Fed’s rate hike
A visitor stands in front of a row of African flags in Johannesburg, South Africa. (Reuters/Siphiwe Sibeko)
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WRITTEN BY
Lily Kuo
December 19, 2015 Quartz Africa


For the past year, African economies have been emotionally preparing for the US Federal Reserve’s rate hike. Now that it’s happened—an increase by a quarter point of the benchmark short-term interest rate—the effect has been largely anti-climactic.




Currencies in Kenya, Uganda, and Ghana were mostly unaffected and are expected to stay unchanged next week. Stocks from emerging markets overall rose with a benchmark emerging equity index reachinga nine-day high. Central bank officials on the continent have issued staid comments about how prepared they are to defend their economies as years of an emerging market boom fueled by low interest rates in the US threaten to unwind.




Analysts say the long-anticipated rate increase has already been priced in. African currencies have already taken a beating this year. Falling commodity prices and lowered demand from China are putting pressure on Nigeria’s naira and South Africa’s rand especially. Investors are expected to have withdrawn a net $541 billion from of emerging markets in 2015. Central banks on the continent have been raising interest rates despite slowing growth.




Still, the worst is not over. Countries like Ghana, with a high current account deficit and rapid build up of debt in the private sector, or South Africa with its high levels of foreign debt, will be the most vulnerable to the risk of capital flight. An analysis by the Institute of Chartered Accountants in England and Wales (ICAEW) ranks African countries by their vulnerability according to these three factors.




Countries most vulnerable to a US Federal Rate Increase
Ghana
Seychelles
Guinea
Tanzania
DR Congo
Kenya
Tunisia
Benin
Ethiopia
Mauritius
Mozambique
Togo
Republic of Congo
Rwanda
Liberia
Chad
Burkina Faso
Eritrea
Zimbabwe
Libya
Djibouti
Comoros
Niger
Sudan
Mauritania
Much of Ghana’s debt is in dollar-denominated bonds and Accra is still planning another eurobond issue next year at a higher rate to attract investors. As the Ghanian cedi slumps against the dollar, paying back those debts will be even more expensive. Kenya’s current account deficit, at 10.4% of GDP and private sector credit growth of 17.8% since 2013 also makes East Africa’s largest economy more vulnerable to the rate hike.




Countries least vulnerable to a US Federal Rate Increase
Botswana
Swaziland
Malawi
Cabo Verde
Guinea-Bissau
Namibia
Gambia
Egypt
Sao Tome and Principe
Morocco
Burundi
Central African Republic
South Africa
Angola
Sierra Leone
Lesotho
Gabon
Nigeria
Equatorial Guinea
Senegal
Cameroon
Algeria
Uganda
Madagascar
Mali
Zambia
Cote d’Ivoire
South Africa is ranked 40th but things still don’t look good for sub-Saharan Africa’s second largest economy. Dependent on mining exports to a slower growing China, it is expected to see growth of below 1.5% this year. Government debt is expected to reach 49% of GDP in 2016. Angola, the continent’s second largest oil producer, is hit by low oil prices in an industry that is its main source of foreign reserves. The country may struggle to pay for its imports of food, consumer goods, and industrial material.




The fallout is not just limited to the continent. “African economies are still expected to be one of the brighter spots in the global economy in our forecast horizon. This means that many other economies are relying on Africa for important growth opportunities, and hence a fallout there could impact the availability of attractive investments, weighing on global levels of FDI and other financial linkages,” Danae Kyriakopoulou, ICAEW’s economic adviser and senior economist at Cebr told Quartz


http://qz.com/577459/the-african-countries-that-will-be-most-affected-by-the-feds-rate-hike/

 

[Nzinga]

http://www.businessinsider.com/who-actually-owns-the-federal-reserve-2013-10?IR=T

First of all I have told you about arguing and making presentations by posting
hyperlinks. It is lazy, and in this particular case a waste of time for anyone
trying to get the answer to specific line you have quoted.

To everyone else, I will not subject you to hyperlinks. All you need to know
is that the Federal Reserve is a private bank; In the phone book, it not listed
in the blue government section, but in the white pages, right there under
Federal Express, another private institution. Furthermore, it is neither federal
nor has any reserves anyone knows of. Additionally, lawsuits on the matter
have repeatedly been adjudicated that the Fed is a private bank.

It was created by an act engineered by Nelson Aldrich, Warburg, JP Morgan
and others who met secretly at Jerkyll Island, after senator Nelson Aldrich had
spent $300k (an enormous fortune at that time), to go on a 2-year consulting
tour of Europe (which in reality was to receive tutelage from the Rothschilds);

Before that, in 1907, JP Morgan and his friends organised a recession in which
small banks were wiped out. At the end of it, JP Morgan offered to "solve the
problem" by lending $250 million to the struggling remaining banks.

This "worked", and warmed the hearts of many, not least of them, US president
Ted Roosevelt, who authorised a commission to study the prospects for a
central bank.

In 1913, income tax was introduced in the US for the first time; in December
that year, while most of Congress was in recess, the Federal Reserve Act was
passed. In fact, the precedence of the income taxation was necessary, because
as with the Bank of England 215 years before, taxes were necessary in order
to guarantee that the government would be able to repay the cost of the money
it borrowed from the private Federal Reserve...

 

[PDQ21]

The US does not collect enough money to cover the expenses of the government
including wars. To finance these undertakings, it borrows money from Federal
Reserve, which is a private bank. This money is borrowed at an interest rate that
is paid back by the taxes collected by the US treasury. As you can imagine, the
amounts involved are enormous. The most enormous amounts are borrowed during
times of war because no government can countenance loss of a war because of not
having enough money, or refusal to incur deabt. War is the most profitable time for the
Federal reserve, but since Obama will not deploy ground troops, who constitute
the single biggest cost of war, the bankers are not lending as much money to the
Federal government as they could

Thx appreciate the breakdown