Near zero: US Fed announces second emergency rate cut

Discussion in 'Current Affairs' started by ozcopper, Mar 15, 2020.

  1. ozcopper

    ozcopper Administrator Staff Member

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    The Federal Reserve made an emergency interest rate cut to zero on Sunday, a dramatic step meant to make borrowing as cheap as possible for American households and businesses as the coronavirus brings the US economy to a near standstill.

    The benchmark US interest rate is now in a range of 0 per cent to 0.25 per cent, down from a range of 1 per cent to 1.25 per cent. The cut effectively brings the nation's interest rate to zero as President Donald Trump has urged for months. The Fed also announced that it is restarting "quantitative easing," like the central bank did in the aftermath of the Great Recession to try to get money flowing again in markets and the broader economy.

    More: https://www.smh.com.au/business/markets/us-fed-announces-emergency-rate-cut-20200316-p54acg.html
     
  2. heartastack

    heartastack Active Member Silver Stacker

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  3. leo25

    leo25 Well-Known Member Silver Stacker

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  4. leo25

    leo25 Well-Known Member Silver Stacker

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    Can we call America a socialist country yet? or are we still meant to be in denial?
     
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  5. sterling-nz

    sterling-nz Well-Known Member

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    USA is not a socialist state.
    And liberals are all inclusive but do not tolerate some things because they consider them bad.
    :)
     
  6. Jason1

    Jason1 Well-Known Member

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    o_O
    if the USA is a socialist state they didnt read the socialist hand book very well.
     
  7. leo25

    leo25 Well-Known Member Silver Stacker

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    or maybe you didn't understand the socialist handbook very well?
     
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  8. Jason1

    Jason1 Well-Known Member

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    Having secondary education and degree in economics, I understand the difference between socialism and capitalism very well, thank you very much.
    USA is not a socialist state as much as you may like to think so.
     
    Last edited: Mar 15, 2020
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  9. leo25

    leo25 Well-Known Member Silver Stacker

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    Thanks for clarifying your poor understanding.
     
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  10. sterling-nz

    sterling-nz Well-Known Member

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    You are correct of course the USA is not a socialist state, but could we perhaps agree they are no longer a pure capitalist state?
    I mean government supporting struggling businesses and the likes of Amazon and ebay BANNING PROFITEERS from selling masks and hand san does not seem like a purely capitalist approach to me.
    What they call profiteers now used to be called scrappers who saw a way to make money in true capitalist form (supply v demand) and got rich doing if often from nothing.
     
  11. Jason1

    Jason1 Well-Known Member

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    I think the example is more indicative of tech company CEO's who are notoriously known for being left leaning, seeing those policies come from the companies them selves, which is not really an indication of the country it self.
    Those tech companies are A funny breed, they like to have it both ways, they like to spread their Left ideals but at the same time happy to profit highly from the capitalist world they live in.


    ------------------------------------------------
    edit removed comment, as its not worth entertaining the stupid debate any longer
     
    Last edited: Mar 16, 2020
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  12. Agnostic

    Agnostic Active Member Silver Stacker

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    Socialist, Fascist, Crony Capitalist, Mercantilist and Empire are all terms that could be used together or separately to describe the political entity known as the United States of America.
     
  13. leo25

    leo25 Well-Known Member Silver Stacker

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    Maybe we should all describe what we think Socialism means, as it's one of the grey areas where everyone has a slightly different view.

    To me it just means government controls/ influenced the large scale things in society and leaves the smaller things to the individual. So on an individual level you still have the freedoms to do more or less what you want, but maybe government keeps a closer eye on you. But on large scale they will either control or fund what they feel is needed instead of letting the market choose.

    That's why to me it seems like America is going in that direction (like Japan). Government/central banks now put money and regulations into areas they feel needed and therefore choosing who wins and who loses. They also keep a very close eye on what everyone is doing and trying to influence their decisions.
     
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  14. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    Whatever the aim was, I think it's not working the way they intended... o_O Global credit markets are not buying it. Liquidity crisis 2.0 here we come?
    CB's attempting coordinated effort. https://www.bankofcanada.ca/2020/03/provision-global-us-dollar-liquidity/
    "The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements."
     
  15. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    I think Thatcher said that Socialism works until you run out of everyone else's money.
     
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  16. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    RBA readies liquidity 'bazooka':
    As Australia's financial system adjusts to the coronavirus (COVID-19), financial regulators and the Australian Government are working closely together to help ensure that Australia's financial markets continue to operate effectively and that credit is available to households and businesses. Refer to earlier CFR press release. Australia's financial system is resilient and it is well placed to deal with the effects of the coronavirus. At the same time, trading liquidity has deteriorated in some markets.

    In response, the Reserve Bank stands ready to purchase Australian government bonds in the secondary market to support the smooth functioning of that market, which is a key pricing benchmark for the Australian financial system. The Bank will also be conducting one-month and three-month repo operations in its daily market operations until further notice to provide liquidity to Australian financial markets. In addition the Bank will conduct longer term repo operations of six-months maturity or longer at least weekly, as long as market conditions warrant. The Reserve Bank and the AOFM are in close liaison in monitoring market conditions and supporting continued functioning of the market.
    https://www.rba.gov.au/media-releases/2020/mr-20-07.html
     
  17. sterling-nz

    sterling-nz Well-Known Member

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    “The problem with socialism is that you eventually run out of other people's money.”
     
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  18. silverhair

    silverhair Active Member

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    So let me get this right, the cure to the massive bubble that built up over the last 12 years created specifically due to cheap money, is to make the money even cheaper again?

    Covid did not create the everything bubble, the cheap money did. COvid is just the pin that popped it.
     
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  19. STKR

    STKR Well-Known Member Silver Stacker

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    That made me sick. The deep state played their Trump card and won the game.

    Does anyone else think that 5G towers would make a sweet treehouse?
     
  20. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    MAGA!!!
     
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