I don't know how many times i have to repeat myself, but the Federal Reserve of the United States does not know the slightest thing about the Economy.  Period.

If they did, they wouldn't have to explain why U.S. mortgage rates on risk-free Mortgage-Backed Securities "guaranteed by the United States of America" are in the 7% range.  No American should have to purchase a "United States guaranteed loan" with an interest rate above 4.0%--today, tomorrow, and forever.  Let me add another Period to that previous sentence.

What does a guaranteed loan by the United States actually mean?  It means that the Government of the United States guarantees that all principal and interest will be paid to the person, company, institution, nation regardless of the condition of that loan with its associate homeowner.  That is why those type of loans get the monicker--risk free loans.

Now, if you were an American homeowner, and you had to pay "usury rates" for a mortgage guaranteed by the country that you live in, would you not get upset at who was making you pay those "usury rates"--thus transferring income from the "poor and middle class" to the wealthy people who are very willing to purchase "usury rate" mortgage-backed securities guaranteed by the United States from poor suckers like you?  

Something like that provides a great deal to the wealthy.  Collecting usury interest income on risk-free loans that do not require rates more than a reasonable estimate of what long term inflation is going to be like over say a twenty or thirty-year period of time.  And for those of you who don't know, the weighted average long term inflation rate in the United States has been under 3% since the end of World War II.  Go figure 

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When i went to graduate school where Donald J. Trumpo got his undergraduate degree (earned or unearned is still the question), in Finance 101 we were taught that the best way to figure out what inflation is likely to be is to "look at current interest rates on risk-free bonds".  The reason is this.  

Bonds are not like stock shares.  Bond rates are based upon the risk of the bond defaulting on its payment.  If the bond has a higher than normal risk of default associated with it, a lender will require a higher interest for that loan than a lender would require for a risk-free loan (i.e., one that guarantees the lender his principal back regardless whether the loan defaults or not).  That makes sense, doesn't it?

A lender who is guaranteeing the risk of a bond should only need to borrow at rate about 0.5% above inflation.  In this way, the lender is assured that regardless of what happens, in the end, and down the future road, the lender will be at least as well off as he was when he purchased the mortgage-backed security in the first place.  This was even proven to be true by an economist back in the 1960s or 1970s, winning a Nobel Prize in Economics for his work.

Any interest that is charged on a risk-free bond (i.e., guaranteed) above the following equation: inflation rate + 0.5%, is "usury interest".  

The Federal Reserve started this practice taking from the middle class and giving it to the wealthier people of our society (who don't use debt) sometime in the early 1980s.  But then, the Federal Reserve's misguided ignorance continued for another twenty plus years and finally caught up with them, resulting in the Greatest Recession Since the Great Depression that started in 2008.

God, you would have thought the Federal Reserve would have learned something from that twenty-year miscue which screwed the typical American homeowner to the benefit of the likes of China, who were purchasing these usury rate loans like they were candy.  And why not purchase those loans--after all you are getting an unearned Premium from the usury rates that the Federal Reserve monitors and enjoys.  China was laughing all the way to the bank while the middle class of America was feeding China with undeserved cash, which in turn, then was used against the United States of America.

Go figure. 

Usury rates on guaranteed loans is a great way to transfer wealth from one country to another.  And there is no other institution in the United States that has a better track record of transferring wealth from the United States to other competing nations than our esteemed Federal Reserve.

The Federal Reserve of the United States is so bad, it is hard to determine which is worse: (1) the Supreme Court; or (2) the Federal Reserve.

Oh well, what do i know.  I only spent fifteen-years monitoring the risk of Ginnie Mae's mortgage-backed securities, which btw, are guaranteed by the United States Government--just in the same way U.S. Treasury bills are guaranteed.  The thing is this.  The Federal Reserve doesn't have anyone (not a single person) on their staff that has spent one-year monitoring the risk of mortgage-backed securities guaranteed by the United States of America.  In fact, i don't think the Federal Reserve has anyone on their staff that even knows how a mortgage-backed security works or what it means for a loan of any type to be guaranteed by the United States of America.

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It has become unclear to me who the Federal Reserve is working for.  They sure as to hell are not working for the working people of the United States of America!  That is something that i will "guarantee". 

Inflation.  Hell, the Federal Reserve is more responsible for the inflation that we are experiencing today--and yet, we are being told that the purpose of all their actions (i.e., non actions) are stimmed to drive down inflation.

The absurdity of it all, makes one just want to chuckle, but then i know that no one else cares because we have to love our Federal Reserve economists, even if they don't know anything about our economy, let alone the world's economy.  

And you can tell anyone just how i feel on the subject.  That is, if you care one iota.

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