{"id":34239,"date":"2018-05-14T08:43:45","date_gmt":"2018-05-14T13:43:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34239"},"modified":"2018-05-14T08:44:14","modified_gmt":"2018-05-14T13:44:14","slug":"this-federal-policy-enabled-the-fracking-industrys-280-billion-loss","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34239","title":{"rendered":"This Federal Policy Enabled the Fracking Industry\u2019s $280 Billion Loss"},"content":{"rendered":"

This Federal Policy Enabled the Fracking Industry\u2019s $280 Billion Loss<\/a><\/h3>\n

Most people probably aren\u2019t familiar with the acronym ZIRP. It stands for zero interest rate policy<\/a> and is the policy that unintentionally created the American fracking bubble<\/a> \u2014 just one of its many\u00a0consequences.<\/p>\n

And while most people may not know much (if anything) about ZIRP or the Federal Reserve<\/a> (Fed), it is likely that they are aware of the impact this policy has on their own\u00a0lives.<\/p>\n

Do you have money in your checking account? Are you lucky enough to have savings? Have you noticed how you don\u2019t make any interest<\/a> on that money and haven\u2019t for almost 10\u00a0years?<\/p>\n

You can thank the Fed and ZIRP for that. One of the results of the Fed\u2019s zero interest rate policy is that the average American saver ends up with close to zero interest on their money in the bank. This is one of the reasons that ZIRP is often described as a wealth transfer <\/a>from American savers to debtors. Because the shale industry is deeply in debt, these companies directly benefit from this\u00a0arrangement.<\/p>\n

Below is a chart of rates for certificates of deposit (CD) since 1980\u00a0\u2014 historically a safe investment that gave people a decent return on their\u00a0savings.<\/p>\n

Since 2010,\u00a0 if you put your money in a CD, you would not even be keeping up with inflation<\/a> due to the low interest rate.\u00a0That isn\u2019t supposed to be how it\u00a0works.<\/p>\n

And as this next chart shows, historically that hasn\u2019t been how it works. The graph below is the federal funds rate since 1950 (this is the interest rate that banks charge each other to lend excess cash overnight). It\u2019s very clear that starting in 2008, the chart flatlined (due to ZIRP) and stayed that way for years \u2014 something that had not happened\u00a0before.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

This Federal Policy Enabled the Fracking Industry\u2019s $280 Billion Loss Most people probably aren\u2019t familiar with the acronym ZIRP. It stands for zero interest rate policy and is the policy that unintentionally created the American fracking bubble \u2014 just one of its many\u00a0consequences. And while most people may not know much (if anything) about ZIRP […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[124,5317,303,331,431,11782,534,723,3481,3650,846],"class_list":["post-34239","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-central-banks","tag-desmog-blog","tag-fed","tag-fracking","tag-interest-rates","tag-justin-mikulka","tag-monetary-policy","tag-shale-oil","tag-us-federal-government","tag-us-federal-reserve","tag-us-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34239"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34239\/revisions"}],"predecessor-version":[{"id":34241,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34239\/revisions\/34241"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}