Entries Tagged 'Knowledge' ↓

In this day and age, what does it mean to be a man?  Who and what defines what being a man is?  Is it having the biggest pay check? the most toys? getting the most women? having the most fun? Is it none of these?  Is it a combination?  

Is a man’s worth reflected by the family he produces, the deeds he does for others?

Should a man be judged by his intelligence?  His knowledge of politics?  His standing in society?

Quick Note - Sorry for the delay in posting, I had to go out of town on business, and have not been able to get to the computer…This post was written a week ago, but it is an August recap.

Economy Update

Here is a quick, easy to read update on the US Economy based on some of the Economic numbers recently released…

US Economy

US GDP grew at 1.9% annual relate (relatively small)

US Housing continued to drop…it is now at its lowest level since the early 1960’s

Unemployment continued to increase, up to 6.1% unemployed, this is the highest level since September of 2003.

Inflation continued to rise.  The June increase comes in at 3.2% annualized rate.  This is mostly a result of high energy and commodity prices.

The US Dollar however has gained value relative to Europe and Japan.  The dollar is up against the Euro, Great Britain’s Pound, and Japan’s Yen by 8%, 9%, and 5% respectively.

The Blog for Men US Economy Grade for August: C

The blogformen gives the US Economy in August a C.  We figure for August, the economy is the kid in class that is trying hard, studying, but just not able to get over the hump.

Sources: Federal Reserve Bank of Dallas

Flickr Credits: Gaetan Lee

What is the Federal Reserve?

The Federal Reserve is the central banking system of the United States of America.  The president appoints 9 members to the “Board of Governors”, with one Chairman of the Board (Currently Ben Bernanke, formerly Alan Greenspan.)  There are 12 Federal Reserve Banks scattered across the U.S. that are basically tools for the Federal Reserve to control the U.S. financial universe.   The Federal Reserve is an independent institution within the U.S. Government, and it does not operate in order to make a profit, however it does make enough money to cover its operating expenses.

What does the Federal Reserve do?

The Federal Reserve is tasked with the job of regulating the monetary policy of the United States, in a way that encourages low unemployment and sound economic growth.  Hmmm…sounds easy enough

What is “The Interest Rate”?

The “interest rate” which we hear so much about is actually the federal funds rate.   This rate is the rate at which banks loan money to other banks (very short-term, usually overnight.)  The fed funds rate is not actually SET by the Federal Reserve, rather it is a “market” rate.  Meaning, the price for money (rate) is determined just like anything else, supply and demand.  When the Federal Reserve announces the fed funds rate, what they are announcing is their TARGET.  The Federal Reserve then influences this rate by buying or selling Treasury Securities in the open market (just like you or I could). 

(Quick Lesson on how this works:  By buying Treasury securities the fed is taking investments out of the open market and putting cash into it.  This cash will eventually find its way into a bank.  Since the banks have more cash they will all be more willing to lend cash to one another…greater supply, less demand, the price of money (interest rate) will drop.  Obviously the opposite is true if the Federal Reserve decides to sell Treasuries)

What does this mean to me?

In very simple terms, the federal funds rate more or less directly effects the interest rates you see in your day-to-day lives.  If the fed funds rate drops significantly, you will see that you can get a pretty good rate on a mortgage or a car loan…but on the flipside you aren’t going to get much of an interest rate on your savings account.

A couple interesting facts on the Federal Reserve:

-       The Federal Reserve Bank in NY holds more gold than anywhere else in the United States.  Even more than Ft. Knox

-       Any earnings the Federal Reserve makes beyond its expenses, are turned over to the Treasury

Thank you to all who have been reading this blog so far.  I encourage comments to start discussion , give feedback, or offer suggestion.  If you like what you have read please use the “add this” bar to tell digg, stumbleUpon, or any other site that you enjoyed it.  Again, thank you all for reading.

Flickr Credits: epicharmus