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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Tuesday, July 22, 2008

Harley-Davidson Rides on a New Touring Chassis for 2009

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MILWAUKEE, July 22, 2008 /PRNewswire-FirstCall via COMTEX/ ----Harley-Davidson puts an all-new chassis under its popular Touring models for 2009, redesigned from the tires up for a responsive ride and enhanced capacity and comfort. The seven 2009 Touring models ride like new motorcycles, but the iconic styling of each has been carefully preserved.

The Motor Company also makes news in the power cruiser category, as the taut lines and sweeping side-pipe exhaust of the new V-Rod Muscle takes the VRSC line in a new styling direction. Two other models, the Dyna Street Bob and the Heritage Softail Classic, receive a significant styling make-over for 2009.

"Under the skin, our 2009 Touring models are essentially new motorcycles," said Bill Davidson, Harley-Davidson Vice President, Core Customer Marketing. "There is likely no profile on the American road more distinctive than that of a Harley-Davidson Touring motorcycle, and we were able to retain the character of each model while significantly improving the riding experience in many ways. With the new V-Rod Muscle and technical and styling enhancements to other models, Harley-Davidson motorcycles are leading edge with authentic heritage and original design."

Forged of steel and torque, backed by millions of miles and a century of experience, Harley-Davidson motorcycles exert an irresistible force to move forward. Equally dedicated to innovation and heritage, Harley-Davidson fuels the rider's passion with machines, and a motorcycling experience, that simply cannot be duplicated.

Highlights of the 2009 Harley-Davidson line include:

-- Seven Touring models rolling on a new chassis that combines a new frame, swingarm, wheels and tires, plus redesigned exhaust and engine mounting. The results include crisp maneuverability, more luggage capacity, enhanced heat management and increased rear tire life.

-- Toned and brawny, the V-Rod Muscle brings urban energy to the VRSC power cruiser platform. Sweeping side-pipe exhaust, a clipped-and-clean rear end, and gaping air scoops are a perfect match for the high-revving power of the 1250 Revolution V-Twin.

-- The Dyna Street Bob gets a fresh dose of retro bobber attitude, with a newly chopped rear fender, blacked-out powertrain and an LED taillight from an old school custom.

-- Only Harley-Davidson would dare to mess with near-perfection, as Harley-Davidson stylists worked to update the Heritage Softail Classic. Taller handlebars, a "Cat Eye" console and optional chrome aluminum profile laced wheels with wide whitewall tires are just a few of the new features on this popular and nostalgic cruiser.

-- The Harley-Davidson Custom Vehicle Operations (CVO) crew turns its inspiration loose on two new limited-production models for 2009, the CVO Fat Bob and the CVO Road Glide, each powered and the Screamin' Eagle 110 V-Twin engine and turned out in bright chrome, big paint and wild new accessories. The CVO Ultra and CVO Springer make an encore appearance in the 2009.

-- Select Sportster models have recalibrated suspension and improved damping for improved ride quality.

-- All Sportster and FX models (except the Dyna Fat Bob) have a new front fender that better matches the radius of the front tire, closing the gap between fender and tire for a cleaner look.

-- Harley-Davidson will offer six new color combinations for 2009, plus three custom color combinations.

Harley-Davidson Motor Company, the only major U.S.-based motorcycle manufacturer, produces heavyweight motorcycles and a complete line of motorcycle parts, accessories and general merchandise. For more information, visit Harley-Davidson's Web site at http://www.harley-davidson.com.

SOURCE Harley-Davidson

http://www.Harley-Davidson.com

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