Fed policy has profound effect on banks and business

Banks earn on the margin between cost of funds (deposit cost) and income from asset (loans and bonds). When the Fed Reserve raised rates 525 basis points in a year, the cost of funds or the amount banks pay to depositors went up in step. Bank costs rose substantially and reduced margin.

Usually bank asset returns (income on loans) would also increase. That is, a bank could raise loan rates and maintain a margin over its cost of deposits.

Not this time. The long end of the yield curve did not go up. Therefor bank net interest margin is squeezed. Ironically, higher loan rates depress loan generation.

Expect bank earning reports to be down from last year. Banks are still making money, just not as much as before.

The Fed Reserves monetary policy decision, to raise rates, bludgeons all banks into doing less business, fewer loans, and forces some banks to look for other, perhaps riskier, forms of investment income. SVB comes to mind.

The Fed’s monetary decision on rate increases is negative for free enterprise, the private economy and every working citizen. As banks curtail lending, businesses are unable to expand, and fewer people get jobs. This is what Powell is doing. He is beating the free enterprise system with a club.

The Fed could use an- other tool to curb inflation without hurting banks, businesses or citizens. They could reduce the money supply, the liquidity, that the Fed pumped into the economy by taking on federal debt. Absolutely massive debt.

If the Federal Reserve reduced monetary liquidity, they would force Congress to reduce federal spending. That would reduce the effect of government intervention in free markets and allow the private economy to do what it does best: create profits, jobs and prosperity.

PUBLISHER Robert Sweeney bsween1@aol.com

CREATIVE MARKETING DIRECTOR Susan Sweeney Lanam 720-270-2018 susan@villagerpublishing.com

VICE PRESIDENT/MARKETING Sharon Sweeney sharon@villagerpublishing.com

LEGALS

Becky Osterwald legal@villagerpublishing.com

NEWS EDITOR Gerri Sweeney 303-773-8313 gerri@villagerpublishing.com

GOVERNMENTAL REPORTER Freda Miklin fmiklin.villager@gmail.com 303-489-4900

REPORTER

Robert Sweeney bsween1@aol.com

FASHION & LIFESTYLE

Scottie Iverson swan@denverswan.com

DESIGN/PRODUCTION MANAGER Tom McTighe production@villagerpublishing.com

ADVERTISING CONSULTANTS

Susan Lanam — 720-270-2018 susan@villagerpublishing.com

Sharon Sweeney — 303-503-1388

Gerri Sweeney — 720-313-9751 gerri@villagerpublishing.com

Scottie Iverson swan@denverswan.com

Linda Kehr — 303-881-9469 linda@villagerpublishing.com

Valerie LeVier — 303-773-8313 valerie@villagerpublishing.com

SUBSCRIPTIONS

Susan 720-270-2018

PHOTOGRAPHER

Stefan Krusze — 303-717-8282 octaviangogoI@aol.com

EDITORIAL COLUMNIST Robert Sweeney bsween1@aol.com

The Villager is an award-winning, locally owned, independent newspaper. All letters to the editor must be signed. The contributor’s name, hometown and phone number must also accompany all letters to the editor for verification and we reserve the right to edit contributions for space. We attempt to verify all matters of fact but hold contributors liable for the content, accuracy and fairness of their contributions. All submissions become the property of The Villager and may be reused in any medium.

Reverend Martin Niemoller “In Germany, the Nazis first came for the communists and didn’t speak up because I wasn’t a communist. Then they came for the Jews and didn’t speak up because I wasn’t a Jew. Then they came for the trade unionists and I didn’t speak up because I wasn’t a trade unionist. Then they came for the Catholics and didn’t speak up because I was a Protestant. Then they came for me and by that time there was no one left to speak for me!”

2020 Member

A people that values its privileges above its principles soon loses both.

– Dwight D. Eisenhower

Hopping through the South Pacific islands

My latest travel adventure with my globetrotting son was to the South Pacific. It was a fun trip, adding three new countries to our travel tallies. Today I will write an overview of the trip and in my next column I will be get into more specifics.

We took United Airline’s Island Hopper route, launched in 1968. Their Boeing 737-800 plane travels three times per week between Honolulu and Guam, with many stops in between the initial and final destinations. The flight is similar to the “hop-on hop-off” bus tours offered in many major cities.

The first leg of our Island Hopper was from Honolulu to Majuro Atoll in the Marshall Islands where we disembarked and spent the day until catching the next day’s flight onward.

The next segment brought us to the Bucholz Army Garrison, still in the Marshall Islands, where America tracks foreign missiles and tests our own

BY BRIAN C. JOONDEPH

missiles and rockets. Passengers cannot disembark unless they have official business at the Army base.

Next stop was Kosrae, in the Federated States of Micronesia. We stayed on the plane until the next stop of Pohnpei, Micronesia. The country’s capitol is on this island as well as some fun places to visit, which I will discuss in my next column. It was hot and humid, typical for a tropical rainforest island.

After two days we flew to Guam, the flight stopping briefly in Chuuk, Micronesia, a favorite spot for divers due to hundreds of ships and aircraft in the surrounding waters. Chuuk was home to a “reverse” Pearl Harbor attack where American forces launched a surprise attack on the Japanese fleet.

We ended the day’s journey in Guam, a US territory. Those born in Guam are US citizens but cannot vote in US presidential elections and have no represen- tation in Congress. I often feel the same way. Guam is the tip of the American spear in the Western Pacific with large Air Force, Navy, and Marine bases.

Our last island was Palau, a two-hour flight southwest of Guam, close to the Philippines and Papua New Guinea. Palau is so far west that it sits over the middle of Australia.

A country of over 500 tropical islands, we landed in Koror, Palau’s commercial center. It’s known for scuba diving and snorkeling and was the location for the television show Survivor in 2005.

After two days in Palau, we made a very long journey home, two hours to Guam, then 7 hours to Honolulu, and another 7 hours to Denver.

These South Pacific islands are beautiful and certainly off the beaten path, but not as luxurious as one would find in Hawaii or Bora Bora for example. But if you are looking for more adventure than luxury, the Island Hopper is a great way to see a chunk of the South Pacific.

Littleton Elks #1650 help provide backpacks with school supplies to area children

The Littleton Elks Lodge #1650, along with Integrated Family Community Services (IFCS), sponsored 42 out of 300 backpacks for children in the area. The Littleton Elks Youth Committee, through fund raising within the Lodge and individual lodge member contributions, were able to supply the backpacks full of grade-specific school supplies, such as notebooks, pencils, folders and crayons. Children from the Littleton, Englewood and Sheraton Colorado area school districts apply to receive one of these backpacks.

IFCS partners with Roonga to procure school supplies at a deep discount. This partnership makes dollars go farther and ensure every