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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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Friday, August 01, 2008
Estimate of Annual HIV Incidence Increases Significantly; New Estimate Will Show Need For a National AIDS Strategy
Comtex
WASHINGTON, Aug 01, 2008 /PRNewswire-USNewswire via COMTEX/ ----The federal Centers for Disease Control and Prevention's (CDC) long anticipated revised estimate of annual new cases of HIV infections will be revealed on Aug. 3 in a paper published in the Journal of the American Medical Association (JAMA). The revised estimated number of new infections suggests that the HIV epidemic here in the United States is more severe than current statistics portray. The revised estimate for 2006 will replace the current, widely reported estimate of 40,000 annual new infections, which has been used for a number of years. The anticipated estimated number of new HIV infections will remain high, and is higher than what America has been led to believe. After 27 years, the United States lacks a coherent strategy for combating the HIV/AIDS epidemic, reflected in this disturbing increase in the estimate of HIV incidence.
"The revised CDC figure represents an unacceptable level of new HIV infections for a preventable disease. The revised estimate underlines the need for a National AIDS Strategy with measurable outcomes, reliance on evidence-based programs, and sufficient funding," said Joseph Interrante, CEO, Nashville CARES in Nashville, TN and Chair of AIDS Action Council's Board of Directors. "Stopping the spread of HIV and treating all people living with HIV must be a high priority for our leaders and the American public," Interrante added.
"The higher estimate of annual new HIV infections does not mean that HIV prevention does not work. What is failing is national leadership to fund and support sound, scientifically effective HIV prevention programs," said AIDS Action Deputy Executive Director Ronald Johnson.
Federal funding for domestic HIV prevention has not kept pace with the epidemic, especially given the crisis of HIV/AIDS in communities of color, particularly in African American and Hispanic communities and the high impact of HIV on gay men and men who have sex with men. Adjusted for inflation, federal funding for HIV prevention has decreased since 2001. Federal law blocks federal funding for syringe exchange programs, which the scientific literature has demonstrated clearly as an effective HIV prevention tool. Support for comprehensive sex education that helps keep young people healthy is neglected while the current administration supports pouring millions of dollars into abstinence-only programs that have been proven to be ineffective.
"This is not just another set of statistics. There are people behind these numbers. People are becoming infected with a disease that is preventable. We know how to prevent HIV, but we have been fighting this epidemic with one hand tied behind our back, reflecting a disturbing dismissal of HIV prevention as a public health priority," Johnson said. "The new, higher estimate is yet one more wake-up call to our national leaders that they need to do more, starting with developing and implementing a real national AIDS strategy," Johnson noted.
Editor's note 1: AIDS Action's nationally recognized HIV/AIDS expert Ronald Johnson, Deputy Executive Director, will be available for interviews in Mexico City (at the International AIDS Conference), and Rebecca Haag, Executive Director, will be available stateside through the contact listed.
Editor's note 2: AIDS Action will update this release with figures when the embargo period ends.
AIDS Action strives to end the HIV epidemic by advancing public policies that prevent new infections, provide care for people living with HIV, and support the search for a cure. AIDS Action serves as the national voice for AIDS service organizations, health departments, and a diverse network of community-based organizations across the country that provide services for people living with or affected by HIV infection.
Contact: Diego Sanchez, APR
Telephone: 617.450.1524
Cell Phone: 617.835.1455
E-mail: dsanchez@aac.org
SOURCE AIDS Action
http://www.aidsaction.org/
Copyright (C) 2008 PR Newswire. All rights reserved
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