Need to Ask Again - Why are interest rates being kept at a low level?

According to the Federal Reserve the interest rates are being kept low for the following reasons: 

        To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens... Low interest rates help households and businesses finance new spending and help support the prices of many other assets, such as stocks and houses. (http://www.federalreserve.gov/faqs/money_12849.htm) 

I am having difficulty accepting these explanations when reviewing the data that others report:

    1)Business loans under $1 million fell 13 percent between June 2007 and June 2011, and the amount lent has declined 19 percent when measured in inflation-adjusted terms, Federal Deposit Insurance Corporation (FDIC) statistics reveal. (http://www.american.com/archive/2012/may/why-arent-banks-lending-to-small-business-ask-bernanke)

   2)For 2011, the number of reporting institutions of 7,632 fell nearly 4 percent from the number in 2010, continuing a downward trend since 2006... The total number of originated loans of all types and purposes reported fell by about 780,000, or 10 percent, from 2010, in part because of a 13 percent decline in refinancings. Home purchase lending also fell, but by a more modest 5 percent. (http://www.ffiec.gov/press/pr091812.htm)

  3) ...through Q1 2012,  the total household net worth climbed quarter-over-quarter to $62.9 trillion. That's still something of a drop—about 5 percent compared with $66.2 trillion in 2007. (http://www.businessinsider.com/household-net-worth-2012-6) (emphasis added)

The reports of above do not support that lower interest rates helps households and businesses. So I look at the impact on unemployment for a justification - Does a lower interest rate correlate with an increase in employment? Wanting to be fair, I used ten years worth of data from the Bureau of Labor Statistics and the Federal Reserves effective Federal Fund Rate reports to seek a correlation. Below is a chart with these average annual statistics for each - 

Looking at the chart for years 2005, 2006, and 2007 - it indicates that unemployment was decreased when Fed Fund Rates were rising. In 2008, the Fed Fund Rate lowered and the unemployment rate increased. In the following years (2009-2012) the interest rates have remained the same and the unemployment varied slightly. The ten year overview comparison of annual data does not indicate a correlation between lower Fed Fund Rate and lower unemployment. In fact, one could present an argument that there are indications of the opposite impact when looking at the chart. 

It appears that, there are fewer business and home loans being made, household values fell 5% since 2007, and the unemployment rate correlation is questionable. So, I have to ask again, Why are interests being kept so low?

The Power of Words

Today is our gift. The challenges may be harder to unwrap, but this moment is our present. This video offers a great reminder - http://www.youtube.com/watch_popup?v=Hzgzim5m7oU&vq=medium

Easter, life and death

In my early second trimester, 29 years ago today, I lost a child I was carrying.  This day, 29 years ago, is also when I had,what is called by most, the 'near death' experience. Since that time I have learned that the description of my experience is really similar to many others- the light, the questioning if I was ready, the presence of two people waiting for me - but, I have also learned that while the circumstances are similar each person's response is really uniquely their own.  This year the anniversary seems more poignant as it also falls on Easter. Easter, I have learned, has circumstances similar for most, is also very different for each person according to his/her response.  I hope that by sharing my view that others are encouraged to think about their own responses - to both Easter and life.

I still mourn the child I will never hold, but treasure the thought of their being.
Our life offers many rehearsals with series of small deaths and mini-rebirths.
Death isn't the end
Birth is only one beginning
Life holds both and is much more than either
We are really so loved

Making dreams come true?

With all the generous charity drives being promoted during this holiday season, I don't want to discourage the much needed efforts, but I do wonder 'who is really giving and who is receiving?' I ponder the first Christmas and how kings and paupers alike brought what they could to the poor homeless family staying in a manger. They each brought presents but they still knew they were the ones being gifted. When I hear reports that the toys, food, and blankets are 'making dreams come true' I fear that it may be forgotten what a beautiful gift we are given when our charity acts are received. How blessed are those who recognize Christ among the society-labeled poor and how small in comparison are the gift of toys, food, and blanket to being able to share in recognizing the miracle of love today.

Trapped in the Economic Cave-in for too long

It seems to me that the rescuing of the miners trapped for so long is analogous to so many who have been trapped in the hole of this recession: We were all just doing our work when suddenly the world caved in around us -we know there is life going on above us (we read of the tremendous profits and bonuses that large finance/investment companies are receiving) but somehow we are trapped in this dark hole. Perhaps, the miners will inspire us all and give us hope, perhaps this recession that is officially over will soon reach the depths of the cave that has held so many captive for too long. Too much time has been spent telling those who are trapped in this economic cave-in, what they should have done to prevent it or just throwing them day-to-day survival support. When what we need to do is to concentrate on providing a “phoenix” to raise those economically trapped into the sunlight. They, too, deserve, to be lifted out of the hole and onto solid ground.

The Price of our three day weekend - July 4th

My husband just forwarded this email to me, and it is worth sharing... many men, women, and children paid a great price for this coming holiday...

Have you ever wondered what happened to the 56 men
who signed the Declaration of Independence ?

Five signers were captured by the British as traitors,
and tortured before they died.

Twelve had their homes ransacked and burned.
Two lost their sons serving in the Revolutionary Army;
another had two sons captured.

Nine of the 56 fought and died from wounds or
hardships of the Revolutionary War.

They signed and they pledged their lives, their fortunes,
and their sacred honor.

What kind of men were they?

Twenty-four were lawyers and jurists.
Eleven were merchants,
nine were farmers and large plantation owners;
men of means, well educated,
but they signed the Declaration of Independence
knowing full well that the penalty would be death if
they were captured.
Carter Braxton of Virginia, a wealthy planter and
trader, saw his ships swept from the seas by the
British Navy. He sold his home and properties to
pay his debts, and died in rags.

Thomas McKeam was so hounded by the British
that he was forced to move his family almost constantly.
He served in the Congress without pay, and his family
was kept in hiding. His possessions were taken from him,
and poverty was his reward.

Vandals or soldiers looted the properties of Dillery, Hall, Clymer,
Walton, Gwinnett, Heyward, Ruttledge, and Middleton.

At the battle of Yorktown , Thomas Nelson, Jr., noted that
the British General Cornwallis had taken over the Nelson
home for his headquarters. He quietly urged General
George Washington to open fire. The home was destroyed,
and Nelson died bankrupt.

Francis Lewis had his home and properties destroyed.
The enemy jailed his wife, and she died within a few months.

John Hart was driven from his wife's bedside as she was dying.
Their 13 children fled for their lives. His fields and his gristmill
were laid to waste. For more than a year he lived in forests
and caves, returning home to find his wife dead and his
children vanished.
So, take a few minutes while enjoying your 4th of July holiday and
silently thank these patriots. It's not much to ask for the price they paid.

Remember: freedom is never free!
(author unknown)

Unintended Consequences

The government gave the banks large amounts of money to encourage lending and spur the economy. The large influx of funds, though, decreased the banks' need for deposits and thus, lowered the interest rates offered to the general public normally used to encourage increased deposits. Now, with the lower interest rates, the general public's funds are no longer generating interest - their money is not making them money. So, with this loss of income, people are being more careful about spending money. . . It makes me wonder how this was intended to work and where it went wrong.

Health Insurance Coverage

A news report recently stated that a great majority of uninsured adults are under 30 years of age. Wouldn't a large segment of this issue be resolved if the allowance for children to stay under their parents' health plan was expanded beyond the time in school? It seems that if we allowed children to be included under the parents' plan until they were able to secure their own health insurance, the solution would be simple. Why is health insurance eligibility tied to the IRS definition of dependent? Where is the correlation? Couldn't it be easily changed to have eligibility defined as (for example) -
in the last twelve years has been claimed as a dependent in at least two years consecutively - or, a natural, adopted, or stepchild covered under your health plan prior to reaching the age 18 and has not married, reached the age 30, and/or is not eligible under another group plan.

Or perhaps, we could encourage greater scope of school health insurance with an affiliate relationship offered to alumni.

I just wonder why it seems that national programs need to be developed without first just considering a simple solution within the system.

Holiday Preparation

This morning after Thanksgiving I sit in my recliner stretching the morning for as many hours as possible. I watch the news reports and see the masses circling the stores in search for the best holiday deals. Thousands of people seem to be enjoying what I would find so stressful. They dart in between strangers, reach to grab the last prized item, stand in long lines, and melt into a humanity of people on a quest for what they don't have and want to give... all in celebration of the holiday of peace...

I marvel at their ability to smile through it all.. how they seem to enjoy the rush.. and wonder why I have no desire to join them.. I would rather shop online or at a small mom & pop store in a smaller city downtown area for the one of a kind gift..

I wonder how black Friday became a tradition.. I understand our economy depends on it... I am grateful to those willing to step up and shop creating the needed economic indicators... I salute them all with my second hot cup of coffee cuddled comfortably in my favorite chair!

Intimate Strangers

We are crowded in an elevator facing a metal door, we stand behind each other with baskets in a check out line, we sit in a crowded doctor's waiting area, we stand with baggage through security lines... waiting... spending moments or hours together but politely isolated... who are these people I have spent so much time with... who are those taken off balance by a smile and suspicious if a comment is made.. who clutch their bag more tightly if a movement accidentally places us too close... I suppose I will have to wait to know..

Southwest Airlines A - B - C

Southwest Airlines offers "A" seating where the passenger is allowed to board the plane first. In this initial group there is the best chance that you will get premier sitting of your first choice and have a comfortable trip to your destination. What gives me cause to wonder, though, is when the fellow passengers, who will be joining me in the 2 hour trip, will stand in the "A" line for 2 hours to ensure they have the very first choice in comfortable seating for the 2 hour flight.... it just makes me wonder...