Discussion in 'Economy' started by Kevin_Kennedy, May 17, 2009.
Fed Up - Forbes.com
I don't think anyone believes that is the purpose of FED.
What caused inflation and depressed economic growth BEFORE the FED existed?
You see, the FED can be a problem, but the FED does not have to exist for that same problem to manifest.
All it takes are BANKS which lend out money too rapidly, or, if we decentralize and eliminate the FED and a the single currency system, all it takes is private banks which print up too much money.
What it really takes is not a FED but bad banking practices no matter WHAT charter those banks have.
Yes, inflation is caused by the money supply rising faster than the amount of good and services an economy is producing without doubt.
inflation is caused by the money supply not changing when the amount of goods and services are reduced for reasons having NOTHING TO DO with the banking system.
For example, the spiking in oil prices which is inflates the price of petroeum products (read pretty much everything) has nothing to do with monetary policy.
It's true that inflation could occur without the Federal Reserve, but that is only true under a fiat monetary system. If we had sound money the supply of money would only increase with an increase in the supply of the commodity backing the currency, which would probably be gold.
Yes , I quite agree with you on that point
Just as suicide will prevent a common cold, the gold standard will certainly prevent inflation.
Franky, I don't hear much backlash towards the Fed, at least not from ordinary people. There's a fair amount of backlash towards the spending of the administration however.
The FED and its relationship to the banking problem is damned confusing.
But everybody can understand government over-spending.
Yes, and a lot of backlash toward the extroidenary salaries and bonuses of the people who created this debacle.
That seems to be at odds with what Toro is saying, because it was the Fed that chiefly created this debacle.
Gentlemen, all I know is that the FED can buy up Trillions of Dollars of US Government Debt, and when we pay interest on that debt the FED takes that money and puts it in the US Treasury.
The obvious conclusion that can be reached from that reality is that the FED could buy up all of our debt and we would never really have to pay interest on it.
That is the best lending system in the world. The hell with GOLD.
They would buy the debt by creating money, which would debase the currency.
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