Monthly Archives: May 2013

Controls Interest Rate-Banking Structure Very Complex

The banking structure in this country is actually very complex and it will take most people a little time to digest everything. Having said that, though, I can provide you with some very basic information about who sets and controls interest rates.

The Federal Reserve, or the Fed, is an independent organization that doesn’t need the approval of the president or Congress to enact it’s policies.

I suspect most people didn’t know that… I sure didn’t. The Fed’s mandate is to create a stable economy with high employment, minimal inflation and low interest rates.

Basically to ensure that the economy keeps rolling along with as few bumps in the road as possible.

They have several tools to help them accomplish that goal. One of the most important of these tools is the ability that it controls interest rates.

Setting the interest rate is a very important in keeping the economy on a smooth course. The interest rates will directly influence how much money is put into circulation.

The general rule of thumb is that if you have too much currency in circulation it can lead to inflation but too little currency in circulation can lead to a sluggish economy.

The Fed has the responsibility to try to maintain the perfect balance at all times so the economy can grow but inflation doesn’t get out of control.

The Fed uses their economic analysis as the basis for determining what actions they need to take. This comes directly form their Washington D.C. headquarters as well as being compiled from district banks around the country.

These banks are located in large cities from coast to coast. Each of these banks will collect regional economic information and create a profile.

That regional information will be compiled into a comprehensive report that helps the Fed get a complete economic picture of the entire country.

Based on the report the Federal Open Market Committee, a twelve member board which is an arm of the Fed, will meet to determine what changes in policy need to be enacted.

They generally meet every 6 weeks. When the FOMC decides that either more or less currency needs to be in circulation, they will either issue a buy or sell order for U.S. treasuries.

When the FOMC issues a buy order it will result in an increase in the amount of currency in circulation. More currency in circulation means easier borrowing and lower interest rates.

If they issue a sell order, there will be less currency in circulation, and that will translate into higher interest rates – less borrowing and can help reduce inflation.

As I stated above, this is a complex issue and it may take you a little more time and information to fully digest it all.

It is important for you to have as deep of an understanding as possible of the way our economy works.

I know, we are all busy and this information can be confusing, but knowing how it works will allow you the best chance at making smart financial decisions for you and your family.

And now, at least, you have some basics on the inner workings of our economy and insight into who controls interest rates.

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‘Lollipop, lollipop! Oh lolli, lolli, lolli.’ When your sweet tooth cannot be denied.

by Dr. Jeffrey Lant.

Author’s program note. This story began a long, long time ago. Week-days sixty years ago and then some, my father used to take the Burlington Northern Railroad into Chicago. There was a ritual to his commute. My mother, particularly in winter and on the many inclement days which distinguish Illinois weather, would drive over to drop him off in the morning when he looked spruce and sharp, exactly like a young junior executive should look… and pick him up in the evening, when a gaggle of other young wives and children awaited their bread-winning hubbies. He looked suitably rumpled and tired, the way a young junior executive should look after a long grueling day in The Loop. We were all, and he was particularly, comme il faut.

On nice days, my father used to walk home. It wasn’t a particularly long walk but yet our still very much in development neighborhood lacked such amenities as sidewalks. Moreover, the streets were asphalt which melted under the blistering summer sun of the vast prairies. Still, he liked to walk home and he liked company. That usually meant me, particularly in the first years of his commute and, when he grew up enough, Kevin, my brother, whom I treated in the lordly disdainful manner I thought appropriate for such an ingenious little pest.

Of course we all knew precisely how long it took to walk from 4906 Woodward Avenue to the station (hardly more than a whistle stop) we knew so well, right across the street from Mackey’s General Store, at once U.S. Post Office, intelligence center for every single thing happening for miles around, and — you need to know — the object of my affection, every (we thought) kind of candy, many sold for a penny, most displayed in big glass jars, the better to see and to keep the pesky field mice out.

I always made sure there was enough time to review the sweetest merchandise on Earth, both old favorites and new brands we were eager to know, sample, and if they passed our rigorous standards, spend our limited funds on.

Mr. Mackey was our prime source of information; Mrs. Mackey always seemed a shade distant. She busied herself with “women’s” merchandise; (there was always a frock displayed in the window; it was always a year or two out of date; never a la mode. Of course I didn’t know that then. I also didn’t know that the hauteur on regular display was designed to punish her husband for dragging her to this backwater and, worse, keeping her there without possibility of promotion or release. It was all unsaid, of course… but never unknown.

Under the circumstances, it was probably better that our dealings were with the patron himself. He took excellent care of his pint-sized but discerning customers. I’d say now that he was a man who had come to accept his fate and was, therefore, sufficiently at peace, happy to treat children with true courtesy, instead of false condescension.

I imagine Mrs. Mackey might have differed, believing such time wasted. But if she’d ever said such a thing about me, her lord and master might well have reminded her that my family was well known and their collective custom nothing to be sneezed at. And so Mr. Mackey instructed me on a subject no real boy could know too much about… candy. Frankly, the candy industry of the Great Republic should have conferred award after award on this indispensable man; for he didn’t merely sell it… he turned pip squeaks into life time buyers. And that deserved the utmost recognition… as his dear wife probably didn’t know or appreciate… But I do.


Quick, how many songs about candy do you know, particularly songs where the adolescent beloved is likened to one’s favorite confection? The list, of course, is interminable. One of the best known is a little1958 ditty called “Lollipop”. It’s a particularly brainless effusion that was probably written on the back of a match book while waiting for one’s sweetie pie to check her prom ensemble — for the twelfth time.

Like so many such ditties once it’s in your head… there is no possible way to get rid of it. And so, with this article, I plant the brain numbing lyrics in your mind for all eternity, as sung by four sugar pies of the prairie, The Cordettes, from Sheboygan, Wisconsin. They were a sugar overdose indeed… with the de rigueur blinding smiles and a “gee whiz” sincerity which in 1949 arch cynic Arthur Godfrey knew America would take to its heart, for “Oh, lolli, lolli, lolli” meant lolly in Godfrey’s capacious cash register for the quartet was box office! He never over estimated the taste of the Great Republic and he accordingly laughed all the way to the bank… as did The Cordettes whose barber shop banalities flourished from 1946 to 1961.

Check them out in any search engine, but remember: if you play “Lollipop” you will quickly become a syncopated menace and your friends and family will retaliate. A present from the Vermont Country Store may placate them. At the very least it will taste good, and such things are always worth knowing about, since we all make mistakes which are best dealt with by gifts of (affordable) tangible remorse. I know.

The Vermont Country Store, Rutland, Vermont

I no longer recall just when I became aware of this enterprise, but I surely know how. I am, you see, a catalog connoisseur. I get hundreds in the mail because my name is golden, a person who buys from such catalogs and buys frequently. Mail order retailers cherish me accordingly and as I am a man who loves affection, I accept theirs with gratitude since, after 65, one must take such regard anywhere one can find it.

I am therefore glad to know about their special offers and other frequent marks of their continuing esteem and adamant desire to make me and mine as comfortable as possible. This is their grand and soothing mission… and as I yield to no one in my adamant desire to be comfy, cozy I started placing orders… including the candies I recalled so vibrantly from the gustatory treats of my many relatives… and what Mr. Mackey had taught me about candy… information which I have used frequently, always readily available in vibrant memory.

Hurricane Irene.

So things might have gone on, The Vermont Country Store tempting; me indulging, without any attempt to resist whatsoever. Then on August 30, 2011 Hurricane Irene walloped the lovely Green Mountain State, just days before the grandeur of the critical foliage season.

Damages in this disastrous storm were in excess of $700 million. Worse, because the damage was mostly flood and water-related, insurance companies were absolved from helping Vermonters; people I knew well from having lectured at its fine, picturesque university. It was an outrage that doomed many businesses… but not the Country Store. Its people reacted with the typically understated phlegm for which all true Vermonters are famous.

“How were things after Irene?” “Bad.” What would they do?” “Persevere.”

And so they did.

That meant contacting all their many customers worldwide and making offers that could not be beat and customer service that went beyond excellent.

Such offers, of course, caught my attention. Thus last Christmas I found myself on the telephone too near December 25th for comfort. When I called in to place my fourth order of the day, the customer service representative said, “You really like us!” I guess so. Christmas present… then present for me… Christmas present…. then another one for me. It was a rhythm that worked and of course candy was an important part of the haul.

No stinting.

With every item I bought, with every item I ate, I felt like the Good Samaritan, helping the folks Vermont way get through their long night’s journey into day whilst slowly savoring each piece of sugar heaven. And that’s why right now, right here there is a box from The Vermont Country Store filled with 11 pounds of sweet perfection… the bridge mix my grandmother loved… the licorice that was my father’s favorite… two boxes of chocolate truffles (to be shared with no one)… giant gum drops 1 inch in diameter and about 1 inch tall. And, yes you guessed it, something “sweeter than an apple pie”…

“Lollipop, lollipop… Oh, lolli, lolli, lolli.”

About the Author

Harvard-educated Dr. Jeffrey Lant is the author of 15 print books, 2 ebooks, and over a thousand articles on a variety of topics including business, and marketing. Republished with author’s permission by Daniel Fischer