The Fed Shows Who's Boss . . . How Government Actions Make or Break Markets . . . Rising Interest Rates Can Cause National Debt to Explode

The Omaha Bugle-Global News Network

In the newly redecorated newsroom of the Omaha Bugle which features tasteful original paintings of dogs playing poker, Adam and Jeff discuss the Fed's numerous increases in the federal funds rate over the past year which have led to a doubling of the interest rates most consumers pay. They talk about how these increases will have an explosive effect on the cost of financing the government debt which is now over $31 trillion. Adam and Jeff also discuss the negative effects of rising interest rates on asset market valuations, particularly in view of recent declines in the stock market as well as other, more speculative asset classes such as cryptocurrencies. In short, rising interest rates increase the costs of speculating in various asset classes; the more speculative the asset, the greater the impact rising rates will have on asset values. Adam and Jeff also consider the long-term psychological impact of near-zero interest rates; ultra-low rates encourage government leaders to spend money even more recklessly because the costs of financing increased debt are perceived to b e almost non-existent. Jeff is about to make a really interesting point about they ways in which government debt can be reined in when one of the studio engineers accidentally spills a cup of coffee on the control panel and shorts out the circuits in the studio and cuts of the broadcast in mid-sentence.