This week the Federal Reserve went back to the playbook and pulled out a trick that is 50 years old. They called it Operation Twist. In Federal Reserve terms, the twist is selling off some short term debts it is holding in order to buy long term Treasuries. The goal is to bring down long term interest rates in hopes of spurring home purchasing. A side effect of the twist is there is pressure on banks to make money through lending as the long term debt rate becomes very close to short term rates. This makes it difficult for banks to borrow short term money to finance long term debt at a higher rate. Whether or not Operation Twist will have a positive impact on the economy is yet to be seen.
Whether or not Operation Twist impacts you, you need to stay on your personal finances. These articles will help you do that:
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Free Money Wisdom | Pay Cash or Finance a Car? That is the Question!
Oblivious Investor | Projected 2012 Tax Brackets and Standard Deduction
Narrow Bridge Finance | Home Buyer’s Guide Part II: From Offer to Contract
The College Investor | Best 401k Moves
RothIRA.com’s Retirement Planning Blog | Should You Hold Cash in Your Roth IRA?
Everyday Tips and Thoughts | Leaving Kids At Home When School Shopping?
Prairie Eco-Thrifter | Skip the Gym, Sweat at Home 2
Canadian Finance Blog | Improve Your Career
Barbara Friedberg Personal Finance | WEALTH AND ECONOMICS; Community versus Country Club
My Personal Finance Journey | What if the Entire World Worked From Home?
Couple Money | Are Kids Really That Expensive?
Mom’s Plans | 10 Ways to Buy Organic Foods on a Budget
Money Smarts Blog | Can Home Owners Benefit From Falling Real Estate Values?
The Online Investing AI Blog | What’s the Difference Between Cheap People and Mooches?
Financially Consumed | Launch Your Career Sideways In 30 Minutes
Smart on Money | How We Paid Cash For Our New Car
Sustainable Personal Finance | Not Another Top 10 Reasons to Cancel Cable List
So Over Debt | Why Personal Finance Bloggers Should Never Date Each Other
Debt Free Adventure | Find Work You Love
Free From Broke was featured in the following carnivals this week:
Festival of Frugality # 298 – Funny Graduate School Cartoons – September 20th, 2011 Edition
Disease Management Care Blog: Cavalcade of Risk – Terrorism, CyberWar, Floods, Bad Mortgages, Robberies, Investment Losses and Disease Edition
Totally Money Blog Carnival XXXVII | Control Your Cash: Making Money Make Sense
Yakezie Carnival : Capitol Building edition
{ 15 comments… read them below or add one }
Thanks for the mention!
You’re welcome Hunter.
Thanks for the link, what a fantastic roundup!
By the way, how much lower can interest rates go for long term borrowing???
I dunno, maybe to the point where the gov’t is actually shoving money into our pockets in the hope we spend some of it?
Thanks for the inclusion!
You’re welcome Jon.
Thanks for the inclusion.Hope you’re having a great weekend.
You’re welcome Miss T. Outside of a web server hack, the weekend has been great. Hope your is great too.
Thanks for including my post looking at what things might be like if everyone worked from home!
My pleasure Jacob.
Great list… Wow, don’t they know the Twist went out in the 60s? That’s one retro that is doomed to sizzle out!
Haha, the classics always come back!
Thanks for explaining what the twist actually is. .I hope it works, but this feels like another gimmicky, short-term tactic that isn’t addressing the real problem.
And thanks for the mention.
Yeah Julie, the underlying problem is we’re in a big mess!
I agree with the Fed’s twist strategy however, without job creation I don’t think the housing market is going to benefit. Foreclosures are still a real problem as well.