Recent content by eugenekop

I don't understand how is this related to government spending

You forget population growth. Perhaps you mean this graph: http://www.usgovernmentspending.com/spending_chart_1903_2012USd_13s1li011mcn_F0f Though I don't understand why this graph is so different from the GDP graph

Well, even with total spending it goes from 30% in 1960 to 32% in 2000.

Look at this chart please. http://www.usgovernmentspending.com/spending_chart_1903_2012USp_13s1li011mcn_F0f Spending was 21% of GDP at 1961 and at 21% of GDP in 2008 (before the recession). Can you explain this? I thought the federal government grew enormously in the last decades.

He says a rise in interest rates will be a game over. Why is that? Because the government won't be able to borrow more?

I'm sorry for opening another thread on this, but I am not from the U.S. so I'd appreciate a synopsis of what is going on there :-) 1. From what I understand there are a lot of foreclosures in the last few years, which I assume lead to an increase in the supply of houses and and thus an...

I should have mentioned that I am a versed libertarian and supporter of the Austrian school of economics. Naturally I know that inflation increases all prices. My question was why commodity prices are increased significantly more than others. For example why oil, food and farm prices went...

Appreciate your answers.

Thank you Paul. My first question though was specifically about "adjustable rate loans". How does the Fed encourages people to buy those instead of fixed rate loans? Also about question 3, am I right about that analysis? Thanks.

1. From: http://marketplayground.com/2012/09/17/peter-schiff-operation-screw/ How does Bernanke create incentives to take adjustable rate loads? Does he buy more of these type of mortgages? Why is he even interested in this? 2. What's the difference between what ECB and the Fed are doing...

Thank you guys. It is clearer now.

I've read the following Wiki page: http://en.wikipedia.org/wiki/Excess_reserves And I didn't understand the following statement: "Although research by Fed found that it is interest paid on reserves that helps to guard agains inflationary pressures.[2] Under a traditional operating framework...

Thank you for the detailed answer! I have a few follow up questions: 1. What's the point of reserve requirements if the banks can always borrow money from the Fed to keep them? In other words, what are the incentives for banks NOT to borrow money from the Fed? 2. You said "These loans require...

Do they simply buy or sell securities (mostly short-term bonds), or do they lend money directly to banks? Thanks.

Thank you for the detailed explanation Steven.