If we can agree that interest rates have typically trailed a rising economic environment with rising rates can we then agree that trailing rates of a flagging economy into the negative would be a reasonable situation?
If so, a mere calculation with variable ability to adjust the levels of resonated inflation or deflation is all we need to replace the reason of the Federal Reserve. I suggest this gives their economists time to focus on timing for the meaningful application of such adjustments. Doing so may bring about a major improvement to our ability to stabilize economic progress’ effect on our lives and on our currency’s stability with the increasing certainty of meaningful reaction to economic change across any foreseeable amount of time.
THE THIRD SHELL
Now for something completely different, but related. Think about this issue again from a complementary parallel perspective. You may have heard of 3-card Monty. It’s a game where misdirection tries to fool you into believing in one location when the other location is actually the winner. In life, the Shell Game is one which often fools people and makes the truth seem like an obvious answer when known. For the Federal Reserve, the Shell Game I discovered is pretty interesting…..
Think about the interest rate system. The rates go from zero to any number up to 100. Now consider the Shells.
0 – No limitation on money when applied
1+ – Increasing limitation when applied
Where is the THIRD SHELL? There isn’t one. But there could be. Right now, the Federal Reserve only has the means to either limit our money supply or not to limit it. How does the Federal Reserve INSPIRE our money supply?
-1 – Increasing inspiriation when applied
With the third shell (-1) in place you can clearly see the other half of opportunities The Federal Reserve has at its disposal. When you get a chance, ask them about the NEGATIVE ONE.