Does monetary policy affect your current spending, and how?
357186
Depends how current.  Monetary policy takes a little while to trickle through the various layers before it impacts the end consumer.  Longer term, prices across the board will change after a change in monetary policy and that would affect spending.
951801
Probably more important considering the interest.\n\nSeriously though, you assume money is important to me now, which it is not.
391104
Budgets have never worked for me, but I find if I put money in a hard-to-reach savings account the first day I get paid, I automatically spend less that way.\n\n...and then you can spend the rest as you like, it just has to get you to the end of the month.  DVD players aren't that expensive nowadays...I don't know much about facials, but as I said, once you have put money aside, the remaining funds just have to get you to your next paycheck...if you make a mistake, the savings account is still there in that hard-to-get-at-but-reachable location.
221216
I don't know who told you that, but typically, what you could buy last year cost less than what you would pay for it today. This means that last years dollars were actually worth more. That's what inflation is all about.
77747
No, just general slowing followed by a significant decline in 2007. \n\nSpending in Iraq and Louisiana along with a continuation in consumer spending will carry 2006. Once real estate commences a decline and real estate refi $'s are not available to augment consumer spending and the budget deficiet eliminates the possibility of a tax cut as a stimulus then the consumer will no longer have the ability to carry the economy by spending. Escalating long term interest rates and weakness in the dollar compared to foreign currencies combined with continuation in budget deficeits will lead to major slowdown in foreign investment in the private and public sector (bonds). A prolonged recession will follow that will include significantly higher unemployment as corporations cut costs by continuing to outsource labor. \n\nThe fed will first stop the short term rate increases and then they will try to cut rates, but it will be too litle to late. Bush will go down in history as the weakest President of all time.
861005
Most of those facts are incorrect. \n\nOil prices up until two months ago were the highest since the mid 1980s (relative to the dollar value). The price drop pre-election has already started to reverse, by +10cents in the past two days.\n\nSure, taxes are lower. But deficit spending has been at an all-time high, and the federal national debt has more than doubled in the past 6 years alone. In other words, we're gotten more in debt since Bush took office than in the past century before that.\n\nInflation is maintaining roughly the same rate as the past 15 years.\n\nYes, home values are double what they were five years ago. Which means that half as many people can afford to buy a house.\n\nForeign terrorist attacks on US soil occur on average every 7-9 years. So, the current regime doesn't get any credit for not blowing that by having one occur sooner.
446945
No, but I have noticed a HUGE difference in the weight of my wallet! That stuff is expensive!\n\nA.H.
187202
Nothing would happen, because by putting your money in the bank, what you are really doing is lending it to the bank to spend. when you put your money in the bank the bank uses it to make loans and the money cycle continues. the only way the economy would slow down by saving is if everybody save the money under their beds outside the money loop.
323169
http://www.federalreserve.gov/monetarypolicy/reservereq.htm
358357
BUSH IS TRYING TO MAKE IT SOUND LIKE THE ECONOMY IS GOOD, THE FACT IS HE IS DESTROYING THE ECONOMY AND WE ARE HEADED FOR THE BIG CRASH !!!Again, increased consumer income increases demand for production. But how does consumer spending increase, if consumer income decreases? It increases through credit and borrowing. Current consumer spending has been maintained through increased borrowing and credit card spending. To phrase this differently, it has been maintained by consumer "deficit" spending. And this is becoming an increasingly larger portion of consumer spending. A lot of this deficit spending has been financed by the artificially increased value of homes, and the resulting increase in home equity loans. Interest rates have almost a direct effect on the market value of homes. The higher the fraction of buyer's cost going to financing, the less the market value of the home. This is because the seller receives a smaller fraction of the total payment. If interest rates are low, the seller receives a higher fraction of the buyer's payment.\n\nLet me give a brief illustration. Let's say I want to buy a home. Let's say I am a perfect example of all potential buyers in my area. I'm willing to pay $300,000 total for a home. This includes all finance charges, as well as principal payment. Let's say the total financing costs $150, 000. That means the seller will get the other $150,000. That means the market value of his home is $150,000, because that's what he actually gets.\n\nLet's change the finance charges. I'm still only willing to pay $300,000 total for the home, including all finance charges. But the finance charges are only $50,000 now, because of a lower interest rate. The seller now gets $250,000, instead of $150,000. The market value of his home is now $250,000. The market value of his home has increased $100,000 because of a reduced interest rate. The reduced interest rate accounts for 100% of the increase in market value. This increases the equity, and increases the amount he can borrow off this equity.\n\nLowered interest rates have greatly increased home equity values. They have also greatly increased the amount of money that can be borrowed off this equity. This money has made a significant contribution to consumer spending during the last 4 years. Current estimates are that it contributes $200-300 billion per year to our $12 trillion GDP. This is 1.5 to 2.5% of our GDP. Borrowed money has prevented consumer spending from sinking. As interest rates rise, home equity values will decrease. Money borrowed from this reduced home equity will also decrease. The contribution to consumer spending from this money will also decrease.\n\nFrom this, it becomes obvious that consumer demand cannot be maintained by this consumer deficit spending. We are nearing the limit now. We are going to reach this limit in the near future. The home-refinancing loan bubble, and its contribution to consumer spending, is about to burst. When it does, consumer spending and demand will drop. And they will continue to drop, because this is also a self-perpetuating cycle. As consumer demand for production decreases, so will the demand for labor to provide that production. As a result, hiring will decrease and layoffs will increase. This will further decrease consumer income, and the spending that comes from that income. THE PROBLEM ON   THIS SITE IS PEOPLE JUST DON'T GET WHAT BUSH IS DOING !!!!
688950
the short answer is inflation . when inflation is high the fed will raise the interest rate to combat and try to slow down inflation .
1095731
No! At least on the Depression, the main worry of economists currently is that the growth in the US economy is so substantial that the value of our money is increasing, so the Fed is raising interest rates to hurt the economy and to devalue the dollar so that the dollar doesn't increase in value, which could lead to a small drop in the long term value of the dollar. Which is why we don't need the Fed, who should have to ride in short buses instead of limos.
1077571
It is dangerous to live paycheck to paycheck.\nHave you ever found yourself in a financial emergency and had to ask someone to boworrow some money. Doesn't that look and feel sooooooo bad?\nWell, I have found that by tracking the money I spent in one month, I was able to cut back on so much junk that I didn't notice I was spending money on, BUT I did  notice the money when it was being saved in my savings account. Its irresponsible to not save.\nI save 20% of my income everymonth and I split that between two savings accounts, One for long term goals and The other for short term goals.\nLong tern being my home. Short term being anything that might come up that I want to spend on.
1051842
First, when I compare my expenditures to those of my friends, the obvious savings is the fact I do not own a vehicle.  Even with monthly bus passes and the occasional taxi, I spend hundreds less monthly.  Second, I look over my budget almost weekly to see how things might work better.  Once, I worked in a set amount of retirement/savings into my budget so it became a "necessity" like any other bill.  Suddenly, my cable and cell phone stood out as nice-to-haves, not need-to-haves, so I cut them out entirely.  Third, though I'm always on top of my bills, I started using auto-pay functions to ensure I would never get behind.  Fourth, I started eating in and brown-bagging far more, which decimated the amount I was spending eating out.  My next step is to have my bank automatically send money monthly to my investor, like a bill, so it gets done despite how busy I get.
226795
Well, The Federal Reserve Bank regulate the monetary policy and they also change the interest rate of our economy.
107390
7% ARE YOU KIDDING ME?\n\nInflation makes everything go down in value compared to the money you have today. My $100 today buys me 100 shmounces (I made up a new unit to make the math easy) of gold. In one year with 3% inflation it will take $103 to buy those same 100 schmounces of gold.\n\nIf you are borrowing the money then the cost is 4% and you get the benefit of not losing the 3% that you would have lost if you waited, so 4%-3%= 1% nominal. You pay the 4% in interest rates and the 3% in the amount it didn't go down in value because you got to enjoy the fruits right now.\n\nIf you are saving the money then it is 4%-3%=1%. You are paid the 4% interest rate which buys you 3% less when you do spend it.\n\nAs you can see inflation helps you in one case and hurts you in the other but the nominal rate is still the same. Weird huh?\n\nIts all about the math.
1124546
federal reserve rates affect all interest rates, and these are changed due to inflation and other reasons.  the fed "loans" money to other private banks at certain rates and the banks to make money have to charge over those rates.