| The Federal Reserve, in it's simplest definition, is the | | | | can tell the Fed what to do of how to do it. They are |
| "gatekeeper" of the US economy. The Fed greatly | | | | THE most powerful bank in the world. |
| impacts NJ mortgage rates. Before the year 1913, | | | | The Federal reserve can create "liquidity" in the market |
| there were about 30,000 different forms of currencies | | | | by printing unlimited amounts of money. The Fed |
| in the United States. It was a bit unstable because the | | | | impacts mortgage interest rates like you would not |
| different currencies were altered, every one of them, | | | | even believe. Also, when the Fed was created, it |
| by different factors that influenced their value. Hence, | | | | needed a way of increasing or decreasing the |
| there was no "official" currency in the United States. | | | | country's supply of currency in order to prevent |
| Contrary to popular belief, several "men in power", if | | | | inflation, often called the "elastic currency" system. |
| you will, purposely caused various financial panics, to | | | | Inflation, however, is actually the result of too much |
| create and excuse to form the Federal Reserve. Now, | | | | money floating out there, that gets printed by the |
| don't think that I am trying to say that everything about | | | | Federal Reserve. In times of inflation, things cost more |
| the Fed is evil, however, it was implimented MAINLY | | | | and people (buyers) spend a lot less. High inflation |
| because it gives control to a central bank, over the | | | | leads to higher long-term NJ mortgage interest rates, |
| entire US economy. | | | | because the Fed raises New Jersey mortgage rates, |
| You probably already know that the Fed controsl | | | | to combat the high prices of other goods and services. |
| interest rates, and the money supply. Yes, your New | | | | Another reason that mortgage interest rates rise |
| Jersey mortgage interest rate is set by the Fed. The | | | | when inflation is present, is because it offsets the risk |
| power to control the money supply and interest rates, | | | | associated with the inflation. The additional costs make |
| is the power to control an entire nation, and even the | | | | borrowing money less attractive. And when buyers |
| world. Also, the Fed is a PRIVATELY owned central | | | | dont' buy things, (low demand), then of course the |
| bank, who never discloses who or what is actually in | | | | supply of goods gets too high, and companies have to |
| charge of its operations. We do know that it is a | | | | lay off workers, which, in turn, leads to a recession, like |
| Delaware corporation, that's about it. But nobody, not | | | | the one we are in now. |
| the state of NJ, not the Federal Government, no one, | | | | |