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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Monday, July 28, 2008
EPA, Geochemistry Researchers Affirm Granite's Safety
Comtex
HOLLIS, N.H., July 28, 2008 /PRNewswire via COMTEX/ ----The Natural Stone Council (NSC) today announced their unequivocal support for granite as a safe, natural material for use indoors based on prior research and, most recently, both an independent study funded by NSC member, the Marble Institute of America (MIA), and newly issued U.S. Environmental Protection Agency (EPA) statements reaffirming that granite poses no health risk.
On Friday, the EPA released new statements asserting that no credible evidence exists to suggest that granite countertops pose any safety threat. Citing its own assessment of various studies the agency statement said, in part, the "EPA has no reliable data to conclude that types of granite used in countertops are significantly increasing indoor radon levels."
The statements can be found at the EPA website, at http://tinyurl.com/63c5pn .
The EPA's statement reflects the findings of a recent study by geochemistry researchers, who tested the most popular granites used for kitchen countertops in the U.S. and found that none of the stones posed any health risk.
"Based on the testing results and EPA standards, we can conclude that the most popular granites used as countertop surfaces pose no health threat to homeowners," said L.L. Chyi, a Ph.D. and professor of Geology and Civil Engineering at the University of Akron in Ohio.
The 13 granites that were tested are among the most popular countertop surfaces in the U.S. -- New Venetian Gold; Ubatuba; Santa Cecilia; Tropic Brown; Absolute Black; Tan Brown; Giallo Ornamental; Crema Bordeaux; Baltic Brown; Giallo Veneziano; Dakota Mahogany; China Black; and Yellow Star.
"Rumors about the safety of granite have been circulated for years," said John Mattke, co-chair of the NSC and Chairman of the NSC's Sustainability Committee. "However, the facts remain the same. There is no credible scientific evidence suggesting that granite countertops pose a significant radon risk."
The NSC does not refute that some types of granite do emit radon gas, but studies have shown that the majority of stones tested generate either unmeasurable or insignificant emissions that are well below the levels requiring EPA-recommended remediation. Further, the EPA has repeatedly stated that it has never found any evidence that granite countertops contribute significant amounts of radon to a home. Its statements on Friday apparently came in response to a media-fueled panic resulting from questionable reports suggesting that granite posed a health risk.
"The rumors and misinformation that persist focus only on igneous stones, like granite, and do not involve stones such as marble, travertine, slate, limestone, soapstone and others," Mattke said. "There is significant evidence to suggest these baseless allegations about granite stem from efforts by some manufacturers of competing countertop materials to increase their own market share by undermining consumer confidence in the safety, beauty and durability of granite."
For more information on the NSC, visit http://www.GenuineStone.org.
About The Natural Stone Council
Formed in 2003, The Natural Stone Council is a collaboration of businesses and trade associations that have come together to promote the understanding of, preference for and consumption of stone sold under the Genuine Stone(TM) brand. To learn more about the Genuine Stone(TM) brand and the efforts of the Natural Stone Council, please visit http://www.GenuineStone.org.
SOURCE The Natural Stone Council
http://www.GenuineStone.org
Copyright (C) 2008 PR Newswire. All rights reserved
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