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Should the Government Cap Interest Rates?

Posted on | July 10, 2009 | No Comments

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After a very interesting week for treasury rates, I have to ask the question, “should the Government cap interest rates?”  In essence, this is exactly what the Federal Reserve Bank is doing by buying up US Debt.  The issue at hand is that the more debt the Federal Reserve Bank buys, the more paper money they have to print.  No matter how hard President Obama and Ben Bernanke try to convince me, I will NEVER believe that this will not create inflation.  When you have a surplus of a good or service, or currency in this case, the value is going to decline.  If you don’t believe me, ask the home owners in Phoenix, Arizona.

Is it worth it to attempt to print our way out of this recession knowing that it may not work?  If the Fed keeps buying up mortgage backed securities and treasuries and the economy does not happen, then what?  So far, we have spent trillions of dollars trying to spend our way out of this recession and it looks no different than it did before the Stimulus Package.  I honestly hope that things turn around quickly, but I just do not see it.  Home prices remain low and downtrending, the unemployment rate continues to rise and retail sales continue to plunge.  Is there a silver lining that I am missing?

Ultimately, I agree that changes needed to be made.  That does not mean spend MORE money.  Every single day we hear of an addition to the stimulus package or Heaven forbid, a SECOND stimulus package.  I guess our government officials will continue to run head first into the wall and hope it eventually breaks down.  The definition of insanity is doing the same thing over and over again and expecting a different results.  Well, I can honestly say that the people trying to figure out how to fix this economy are insane.

Category: Obama Mortgage Bailout Plan

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