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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 15, 2008
Informex Opens Registration to InformexUSA 2009
Comtex
PRINCETON, N.J., Aug 15, 2008 /PRNewswire via COMTEX/ ----Informex today announced that registration for InformexUSA 2009 is now open and may be arranged on the internet at informex.com. Buyers and sellers of higher value chemicals, specialty materials, biotechnology and sustainable technologies may register any time before December 1 to receive a discount on registration fees. The upcoming event has been expanded to include a Biotechnology Day and Green Chemistry outreach program, a Green Chemistry Forum and Pavilion. InformexUSA 2009 will be held at the Moscone South Convention Center in San Francisco, California, January 27-30, 2009.
According to Jennifer Jessup, Event Director, the InformexUSA event has been expanded to meet the needs of biotechnology companies and other industries that now require support from the chemical industry. "A large number of exhibitors at InformexUSA have the capability to serve the biopharmaceutical industry because of their expertise in small molecule drug manufacturing," she said. "Small molecule drug manufacturing and biopharmaceutical production share a number of similarities," she said. "InformexUSA 2009 will include a biotechnology component as a way to bring together the biopharmaceutical and chemical industries for the purpose of technical advancements in drug manufacturing," said Jessup.
Jessup went on to say that changing market conditions over the past couple of years -- like high energy prices -- are also drawing new attendees to InformexUSA that traditionally do not rely on the chemical industry for innovations. "Rising energy prices and the search for more sustainable technologies has manufacturers in a variety of industries back in the marketplace, looking to the chemical industry for answers," she said. "We have responded to these requests with the addition of the Green Chemistry Forum and Pavilion in 2009," she said.
Tools for all Trades
InformexUSA is conceived as an event that matches exhibiting companies with a highly qualified attending audience. A series of 'high touch' events like receptions and luncheons provide ample opportunities for networking, while 'high-tech' options like online search and appointment scheduling, and real-time attendee lists help everyone to maximize their time at InformexUSA.
Starting in early September, registered attendees will have full access to all of the tools and databases posted on Informex.com.
Note to Editor:
InformexUSA is the leading meeting place for buyers and sellers of high-value chemistry for a broad range of applications. As the leading tradeshow in the United States, InformexUSA has been a marketplace for networking and doing business in the fine, custom and specialty chemical manufacturing industry for more than 25 years. Visitors to the show come from a broad range of manufacturing industries including adhesives, electronics, agrochemicals, biopharmaceuticals, pharmaceuticals, plastics, paints, and more. Each year the event brings together an international mix of more than 4,000 fine and specialty chemicals professionals and 500 exhibitors. For more information, visit www.informex.com
Informex Holdings LLC is a wholly-owned subsidiary of CMP Information Limited. CMP Information Limited is the B2B communications division of United Business Media plc. operating internationally, providing creative professional media solutions to around 20 industry sectors. Its products, including magazines, exhibitions, conferences, awards, information products and websites, are targeted at business professionals across a range of markets; these include Construction & Architecture, Commercial Property, Licensed Trade, Travel, Agriculture and Ingredients. CMPi has approximately 1,000 employees in the UK, US, Asia, Europe, India and South America and in 2005, generated 177m pounds Sterling in revenues. For more information on CMP Information limited, visit www.cmp.biz.
SOURCE Informex
http://www.informex.com
Copyright (C) 2008 PR Newswire. All rights reserved
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