Dear John: Sorely in need of correction

Your article about the Federal Reserve rigging the stock market is beyond horrible. What about idea [sic] that comments about the Fed created a market low.

What about the fact we are in a bull market and have not really had a correction in a very long time.

Your [sic] the moron who keeps shorting.

Keep it up so I can take your money, idiot

You should be fired for this piece of trash article that should be used for wiping my a**. S.C.

Dear S.C. I left all of your typos, punctuation errors and vulgarities uncorrected to show just what kind of a nitwit would write a letter like this.

You are referring to a column I wrote last week with documentation that the Federal Reserve has publicly proposed rigging the stock market and that President Reagan set up the structure to do just that.

So your beef seems to be that I tried to enlighten readers that factors beyond fundamentals are behind the current market bubble. And those forces rescued the market on a recent scary trading day.

And if I’m right about the stock market being propped up, shouldn’t that make fools like you happy? You don’t have to think. You just have to rely on the Fed and others doing their thing — until, of course, they can’t anymore.

And that’s when I expect an apology.

If the truth bothers you, read someone else’s column

I got the same type of letters from ignorant people like you in 1999 and 2007. And when they lost all their money, not one called to apologize — which shows they are rude in addition to being ignorant.

Getting a letter from a know-nothing like you reinforces my belief that this market is in the hands of clowns.

Dear John: I’m not sure the Federal Reserve can take the lead on interest rates. A rise in interest rates could cause the deficit to soar. Current official forecasts are for the federal funds rate to rise to 2.5 percent in 2016 from the current rate of 0.25 percent. If you multiply the national debt by 2.25 percent, you get $405 billion in additional interest expense. T.C.

Dear T.C. Your point is valid and I’ve mentioned this a number of times. In fact, the increase in government financing costs at higher interest rates are what keep officials up at night.

Not the entire $17 trillion in debt would have to be refinanced immediately. But eventually all of the loans mature and they will have to be replaced by new money at higher rates.

The mistaken impression that people are under — as I pointed out in a recent column — is that the Fed has absolute control over interest rates. It doesn’t. So people who buy government debt — like the Chinese — could demand higher rates before they will invest. And rates will rise.

Some say that the Chinese won’t do something like that because they need us more than we need them. Do we really want to wait for that battle to begin before we find out?

Dear John: In a recent column, J.G. asked, “Why aren’t the poor and middle class given the opportunity to earn tax-free income from city and state bonds by buying them directly from City Hall for $100 to $500? The rich keep the opportunity to buy the bonds for themselves.”

Nowhere in your answer did you point out that tax-free munis are not an appropriate investment for the poor or a sizable portion of the middle class.

Accepting a lower interest rate only makes sense if you save enough in taxes to offset the lower income. I’m only guessing, but I assume the transaction costs would be considerably higher to the detriment of all taxpayers. J.P.

Dear J.P. In normal times you are correct. But right now, some of the interest rates on municipal bonds are better than what you call more appropriate investments. That’s because the Federal Reserve has kept interest rates on investments it controls at excessively low levels.

Dear John: Just read one of your columns where you said Quantitative Easing will end this year. A financial magazine reported that the Federal Reserve announced it was set to purchase $85 billion in debt every month. Did that get rescinded already? K.E.

Dear K.E. I think you have a Google search gone awry.

Fed chief Janet Yellen has said QE will end in October. If the economy turns weaker — as I think it will — that may be pushed back some. But it’s clear the QE is headed for the history books, but perhaps not forever.

The Fed currently has a big problem. Unless it raises the interest rates it controls, it will have no tool the next time there is trouble. In other words, the Fed needs to raise interest rates so it can lower them if there is trouble ahead.

The same with QE.

As despised as this money-printing, bond-buying program is, QE gave the Fed a tool that it could use even when rates were zero and couldn’t be lowered any more. So it needs to get rid of QE so it can have the option to bring it back again if there’s a disaster in the future.