I wasn't surprised. If one paid attention it would be hard to expect an increase in the percentage rate after the stunt China pulled.
I was more concerned about the very fact the interest rate did not progress because of China's aggression. China may as well have dropped a bomb in the middle of the global economy. China's export business is shrinking. It has to develop it's middle class to pick up the slack. China's middle class is not the dominant economic force in it's economy, exports are. Their labor is cheap and that is what provided wealth, but, with a shrinking demand for it's export products it has to look to a stronger middle class to take up the slack.
September 18, 2015
The Federal Reserve (click here) held interest rates near zero on Thursday, raising questions over how it will ever manage to lift them off the floor and how effectively it will communicate plans to do so.
Only just over half economists polled have predicted such an outcome, a rare occurrence, and a sign of just how hard it has become to read the Fed these days.
So, 50 percent of economists got it right. That should tell everyone something about the other 50 percent.
Prior to the rate decision, Fed Chair Janet Yellen had not spoken in almost two months. Two of her closest allies had spoken late last month but delivered seemingly contradictory messages just days apart.
After the decision, Yellen said while it was an "unfortunate state of affairs" that every comment by a Fed official is parsed for hints about the Fed's next move, "uncertainty in financial markets" is natural when a policy shift is near, as it is today....
What concerns me is that this would happen again and once again the interest rate would remain the same. It was too soon to develop an indicator of a shift that large and the Fed was not about to rattle the markets anymore than had already occurred.
I am sure the Fed is evaluating data that will develop and indicator of what the future holds to stem any inflation. It has to develop an indicator. This could go on forever and the global market place will be at the mercy of China. That cannot be the case.
This last episode did damage and it cannot be allowed to continue. Investors juggled their focus to find other markets that would remain stable in the fact of the huge exposure to China. Now, either the markets will remain as they are or it will be able to find an indicator that provides insight to more instability in China.
Today, as a couple of weeks ago the Chinese markets were a weapons against investors and the global economy, today it is less so. But, the future cannot be left to chance. There has to be an indicator of trouble in China otherwise there can be too much volatility and too much damage.
The US economy is strong and making progress in the face of weakness in China's export industry. That is because the USA has a strong infrastructure of small businesses that are not touched by China's economy. There is every reason to invest right here in the USA and limit the exposure to China. Our local economies are very stable. There are not large numbers of shuttered buildings to the dismay of the international markets. We need to keep it that way.
International markets need to learn from the health and vitality of the USA's recovery and the stability of local economies, rather than coveting them and taking them over. LEARN and make the lives of their people better than catering to Wall Street and the wealthy.
Our local economies like what we have and we don't want manufactured products from half way around the world.
Enough.
I was more concerned about the very fact the interest rate did not progress because of China's aggression. China may as well have dropped a bomb in the middle of the global economy. China's export business is shrinking. It has to develop it's middle class to pick up the slack. China's middle class is not the dominant economic force in it's economy, exports are. Their labor is cheap and that is what provided wealth, but, with a shrinking demand for it's export products it has to look to a stronger middle class to take up the slack.
September 18, 2015
The Federal Reserve (click here) held interest rates near zero on Thursday, raising questions over how it will ever manage to lift them off the floor and how effectively it will communicate plans to do so.
Only just over half economists polled have predicted such an outcome, a rare occurrence, and a sign of just how hard it has become to read the Fed these days.
So, 50 percent of economists got it right. That should tell everyone something about the other 50 percent.
Prior to the rate decision, Fed Chair Janet Yellen had not spoken in almost two months. Two of her closest allies had spoken late last month but delivered seemingly contradictory messages just days apart.
After the decision, Yellen said while it was an "unfortunate state of affairs" that every comment by a Fed official is parsed for hints about the Fed's next move, "uncertainty in financial markets" is natural when a policy shift is near, as it is today....
What concerns me is that this would happen again and once again the interest rate would remain the same. It was too soon to develop an indicator of a shift that large and the Fed was not about to rattle the markets anymore than had already occurred.
I am sure the Fed is evaluating data that will develop and indicator of what the future holds to stem any inflation. It has to develop an indicator. This could go on forever and the global market place will be at the mercy of China. That cannot be the case.
This last episode did damage and it cannot be allowed to continue. Investors juggled their focus to find other markets that would remain stable in the fact of the huge exposure to China. Now, either the markets will remain as they are or it will be able to find an indicator that provides insight to more instability in China.
Today, as a couple of weeks ago the Chinese markets were a weapons against investors and the global economy, today it is less so. But, the future cannot be left to chance. There has to be an indicator of trouble in China otherwise there can be too much volatility and too much damage.
The US economy is strong and making progress in the face of weakness in China's export industry. That is because the USA has a strong infrastructure of small businesses that are not touched by China's economy. There is every reason to invest right here in the USA and limit the exposure to China. Our local economies are very stable. There are not large numbers of shuttered buildings to the dismay of the international markets. We need to keep it that way.
International markets need to learn from the health and vitality of the USA's recovery and the stability of local economies, rather than coveting them and taking them over. LEARN and make the lives of their people better than catering to Wall Street and the wealthy.
Our local economies like what we have and we don't want manufactured products from half way around the world.
Enough.
