They learned through the Carter/Ragan recession what high interest rates in a recession slows spending. Only real way out of a recession is consumer confidence. If they have no faith in a recovery they don't spend money and hence the economy stagnates. If they feel that a deal is too good to pass up (low interest rates apply) they may spend anyway. Or at least that's what they are trying now. It seems to be helping us hold our own. Don't hear about Ford or GM laying off another 20 thousand every few weeks.
How many of us took on debt when the interest rates were 17-18%? Not I. Rates at 2-3.5% makes the idea of taking on more debt seem like a reasonable risk.
So the Fed has been holding down the rates. And when they are only making 2-3% on loans banks are not going to pay much more than 1% on deposits.
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Today's Featured Article - On the Road with Dave Gohl: Auction Musings - by Dave Gohl. I was thinking the other day about all the auctions I've been to in the last few years. There've been many. Some have been very good, some have been well, disappointing to say the least. But no matter how good or bad auctions may be, we always seem to stay until the item we've come for or are interested in is on the block. I've been to some auctions near and far. I think the furthest has been the Two Cylinder 7 in the Amana Colonies last year. Lots of stuff, lots of people. I've also atten
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