How the 0.75% Federal Reserve Interest Rate Hike Could Affect You

[areyentiraidhi]

 

[dasari4kntr]

Transaction

basic fundamental thing in economy is transaction (buy-sell)...

buy with money or credit...selling goods / services / assets...

buying another name is spending...

total spending / total quantity = price... (10/10 = 1 price  - balance)

if spending more but quantity is less ...(100/10 = 10 price - inflation)

if spending less but quantity is more.. (10 /100 = 0.1 price - deflation)

 

Credit

next fundamental thing is credit...

for every lending..debit will be created for borrower..

credit for lender...debit for borrower..

 

Relation between Transaction and Credit..

every borrower spends it for buying goods/ services/ assets and pays the interest to lender..

for most of the companies..they borrow the capital and invest on projects..which is called leveraging finance...

thats how economy moves...

 

when interest rate increases...

companies cut down the projects/investing on new things (in short decreasing the leveraging finance..)...  because  return on investments should be higher than interest rate...

so..

less spending (because total spending /total quantity = price  -> 10 /100 = 0.1 price - deflation)

⬇️

less income (because of someones spending = someones income)

⬇️

less wealth (if no income there is no wealth)

⬇️

less credit (if no income and wealth there is less credit and more debit)

⬇️

less borrowing (if no credit, lender cant give loan)

⬇️

less spending (if no borrowing/income there is no spending -> price comes down)

⬇️

cycles goes on...until prices comes down and fed decrease the rates

 

[BommaliNinnodhala]

12 minutes ago, dasari4kntr said:

Transaction

basic fundamental thing in economy is transaction (buy-sell)...

buy with money or credit...selling goods / services / assets...

buying another name is spending...

total spending / total quantity = price... (10/10 = 1 price  - balance)

if spending more but quantity is less ...(100/10 = 10 price - inflation)

if spending less but quantity is more.. (10 /100 = 0.1 price - deflation)

 

Credit

next fundamental thing is credit...

for every lending..debit will be created for borrower..

credit for lender...debit for borrower..

 

Relation between Transaction and Credit..

every borrower spends it for buying goods/ services/ assets and pays the interest to lender..

for most of the companies..they borrow the capital and invest on projects..which is called leveraging finance...

thats how economy moves...

 

when interest rate increases...

companies cut down the projects/investing on new things (in short decreasing the leveraging finance..)...  because  return on investments should be higher than interest rate...

so..

less spending (because total spending /total quantity = price  -> 10 /100 = 0.1 price - deflation)

⬇️

less income (because of someones spending = someones income)

⬇️

less wealth (if no income there is no wealth)

⬇️

less credit (if no income and wealth there is less credit and more debit)

⬇️

less borrowing (if no credit, lender cant give loan)

⬇️

less spending (if no borrowing/income there is no spending -> price comes down)

⬇️

cycles goes on...until prices comes down and fed decrease the rates

 

Very well explained 👏 

[dasari4kntr]

 

[futureofandhra]

1 hour ago, dasari4kntr said:

 

2022 lo recession Ani confirm chesara

[Swatkat]

1 minute ago, futureofandhra said:

2022 lo recession Ani confirm chesara

2023 wait till december- marchmana db lo iga edho ipothunatlu threads padthaye 

[DuvvaAbbulu]

2 minutes ago, futureofandhra said:

2022 lo recession Ani confirm chesara

Ha from Dec 5 anta bro 

[dasari4kntr]

10 hours ago, futureofandhra said:

2022 lo recession Ani confirm chesara

సాదారణంగా…రెండు వరస క్వార్టర్స్ నెగెటివ్ GDP వుంటే recession అంటారు…

కాని employment rate, consumer spending, inflation (విభిన్న దృవాలు) స్ట్రాంగా వున్నాయి కాబట్టి…situation సరిగా అర్ధం అవ్వట్లేదు…

ఇప్పటి వరకు ఇది..inflation driven recession గానే వుంది…2008 లో జరిగింది credit driven recession…

Interest rates పెరిగినా consumer spending తగ్గకపోతే credit driven recession గా మారొచ్చు..అది ఇంకా ప్రమాదం..consumer spending పెరగటం అంటే debt పెరగడమే…దానికి price increases కలిస్తే ఇంకా ఎక్కవ debt…

కంపెనీల balance sheets స్ట్రాంగ్ గా వున్నంత వరకు ప్రమాదం లేదు.. లేకపోతే ఒక్క domino effect చాలు…కుప్పకూలడానికి…

[workless_barber]

[Hitman]

This inflation is not driven by Credit, at least not yet. But housing market is. This is cash, savings, supply chain related inflation. Where would the 6 trillion go, the pandemic pumped money. It is the system. Still circulating in the form of employment. government entities has excessive funds due to increased % of tax collection. Lots of employment and cost of living increases.

Fed could not do what it supposed to do in the correct way.  Fed bought trillions worth of bonds, they said they will sell them to reduce the balance sheet. Who would buy those junk bonds in this turmoil .

Pandemic lo world నాశనమ్ కాకుండ చెసిన act ని ఇప్పుడు balance చెస్తున్నరు . But the one who didn't make any profit in the pandemic induced market bubble the middle class they suffer now. 

[MeetFriendz]

On 9/21/2022 at 5:25 PM, dasari4kntr said:

Transaction

basic fundamental thing in economy is transaction (buy-sell)...

buy with money or credit...selling goods / services / assets...

buying another name is spending...

total spending / total quantity = price... (10/10 = 1 price  - balance)

if spending more but quantity is less ...(100/10 = 10 price - inflation)

if spending less but quantity is more.. (10 /100 = 0.1 price - deflation)

 

Credit

next fundamental thing is credit...

for every lending..debit will be created for borrower..

credit for lender...debit for borrower..

 

Relation between Transaction and Credit..

every borrower spends it for buying goods/ services/ assets and pays the interest to lender..

for most of the companies..they borrow the capital and invest on projects..which is called leveraging finance...

thats how economy moves...

 

when interest rate increases...

companies cut down the projects/investing on new things (in short decreasing the leveraging finance..)...  because  return on investments should be higher than interest rate...

so..

less spending (because total spending /total quantity = price  -> 10 /100 = 0.1 price - deflation)

⬇️

less income (because of someones spending = someones income)

⬇️

less wealth (if no income there is no wealth)

⬇️

less credit (if no income and wealth there is less credit and more debit)

⬇️

less borrowing (if no credit, lender cant give loan)

⬇️

less spending (if no borrowing/income there is no spending -> price comes down)

⬇️

cycles goes on...until prices comes down and fed decrease the rates

 

Great .. Thank You .. Alage GDP etc other Finalcial term gurinchi kuda explain bro which you thing is a must to know atleast na lanti vadiki use avutundhi 

 

[dasari4kntr]

10 hours ago, MeetFriendz said:

Great .. Thank You .. Alage GDP etc other Finalcial term gurinchi kuda explain bro which you thing is a must to know atleast na lanti vadiki use avutundhi 

 

Follow this..playlist bro..