The Economy

How about instead of a czar /central planner / price fixer that controls interest rates. ... a MARKET sets interest rates? That free market is not allowed to exist because it doesn't benefit the politicians who benefit from those price fixers who exist to monetize their debt spending, which they do until the rising prices that debt monetization creates becomes so problematic that the price fixers are forced to respond with those "insanely high interest rates."

I don't trust a person to decide what is optimal or suboptimal, especially when it is the product of a corrupt process -- politicians and private banks in cahoots with each other. I'd much rather millions upon millions of people making decisions for themselves so that lenders and borrowers arrive at interest rates organically via voluntary exchange, where those buyers and sellers negotiate freely based on all of available economic and market information and decide whether to transact for themselves.

I know, it's radical.

 

And since then. ... the dollar has lost more than 97 percent of its value, consumer prices have gone up more than 25 times and a $1 bill from the time has less than 3 cents in purchasing power today relative to then. It's actions to keep the mess it created with the financial crisis propped up has created eye-popping wealth inequality that has politically turned our country (the world, really) into a powder keg.

FWIW, the Fed has done zero to prevent crippling banking and financial crises. It caused the stock market bubble that led to the great depression. It is the sole source of financial crises -- too many to name. From the LDC and Savings and Loan crises in the 80s to the Asian debt crises in the 90s to the dot-com bubble to the housing bubble / financial crisis to banks currently being kept on life support with a funding program that values under water portfolios at par and lends to them on that basis (at all of our expense). ... their bubble-making machine doesn't prevent financial crises, it causes them.

 

It's sort of absurd logic.

The country survived Donald Trump's presidency. Therefore, Donald Trump wasn't a problem at all.

Also, @Michael_ Gee was correct. The Federal Reserve was ostensibly created because of the 1907 panic. ... there was no central bank to backstop the panic, so it gave the banks looking for institutionalized power the rationale to make a grab for that power.

What that misses is the cause of the panic, of course. There may not have been a central bank destroying the currency in the early 1900s. ... but the U.S. treasury certainly was. In the years prior to the panic, the Treasury under Leslie Shaw embarked on large-scale purchases of government bonds (exactly what the Federal Reserve has been doing since 2009), in order to expand the money supply and blow up credit (exactly what the Federal Reserve has continually done since 1913 -- and on steroids since the financial crisis). That in turn led to a shadow banking system similar to what is underlying our economy today (they called them trusts, then), which fueled the excessive stock market speculation that caused the panic.

The Federal Reserve as an "answer" to the Panic of 1907 was essentially the same thing as giving the keys to the fire truck to an arsonist.

The global economy has done well since 1913 because of technologies that have transformed the world and made people more productive, if that is your point. Too bad people have been robbed of so much of the fruits of those productivity gains by currency price-fixing schemes, and had to suffer a lot of unnecessary financial instability -- the booms and devastating busts we have had to suffer along the way -- because of the corrupt central planning regime we have allowed to take on more and more power.

 

That's responsive.

 

Speaking of the Fed. They investigated themselves. ... and just cleared Robert Kaplan and Eric Rosengren of front-running the rigged game they themselves were administering, in order to enrich themselves. Surprise, surprise.

Fed’s Watchdog Clears Ex-Officials Kaplan, Rosengren in Probe of 2020 Trades