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Tuesday, September 15, 2015

Trivia: 5 Q's on Interest Rates & the Evil Fed

~ To understand why we chose the specific pics for this posting, please imagine the umpires reacting to getting hit in the testicles by a baseball representing the Federal Reserve..  

Since we started yesterday's post with a trivia question, we figured let's do a few more to provide some info to our readers concerning the topic of interest rates and the evil Fed

Question 1:   When was the last time the evil Federal Reserve raised interest rates?

A)  2014
B)  2011
C)  2006
D)  2001
Answer:  C --  It has been 9 years (2006) since the rotten Fed has raised rates.

Question 2:   Assuming the evil Fed does as its promised for many months/years and finally does raise the rates, it will represent the first time in 6 years that interest is not at this level:

A)  Zero Percent
B)  1/2 Percent
C)  One Percent
D)  Two Percent
Answer:  A --  The evil Fed Reserve has rigged interest rates at zero percent for the last 6 years and counting so banks can borrow essentially for free then lend to you and we, via mortgages, auto loans, student loans, etc at 4 to 9%

Question 3:   Back in 2012, the evil Fed claimed it would start to raise rates when unemployment fell to 6.5%..   How many months ago did unemployment hit that mark?

A)  8 months ago
B)  12 months ago
C)  17 months ago
D)  20 months ago
Answer:  C  --  Unemployment, though completely rigged hit that magical 6.5% mark in April, 2014 or 17 months ago..

The phony unemployment rate is at 5.1% and the evil Fed has yet to raise rates even once

Question 4:   Why doesn't the evil Fed raise rates?

A)  It wants to continually punish savers so they will invest in the market

B)  The Fed doesn't give a shit about the everyday person

C)  Keeping interest rates at perpetual zero allows us to repay our debts at a lower currency value than what we accepted the loans at; we couldn't afford to repay based on real interest on debt

D) There are over $555 trillion derivatives trading globally based on interest rates, the Fed cannot normalize rates without triggering a crisis that would make 2008 look like a picnic.

E)  All of the Above
Answer:  E  -- Yep.. Especially the reasons given in C and D

Question 5:   True or False:  If the Fed ever does raise interest rates, it means the rates will go up for everyone dependent on credit and borrowing to survive?
Answer:  Well..  Yes and No to that..

It is true that if interest rates rise let say half a percent, then lenders will raise their rates as well..

But truth be told, they have been doing it anyways for years even with interest at zero.

For instance, according to Freddie Mac, the average rate for a 30 year mortgage in 2012 was 3.66% and two years later, it went up to 4.17%
How could it go up half a percent if the Fed didn't raise rates?   Simple.. the greedy banks wanted more money from mortgagees so they simply raised them on their own..

Another example are student loans.. back in 2005, interest on school loans was set at 3.37%   Then it gradually went up, then down and back up..  The rate in 2013 was 6.8% which is double since around the last evil Fed rate increase

As stated before, rates go up no matter up but at least those with savings would not see their nest eggs dwindle to nothing if rates were to finally start to rise..