Treasury Wants Stronger FED
May 13, 2008
According to the Financial Times, the U.S. Treasury wants to see a stronger Federal Reserve, which would be able to “stop credit and asset market excesses from reaching the point where they threaten economic stability.”
Another argument in favor of expanding the Fed’s regulatory/oversight powers, is that
The market stability regulator must have access to detailed information about all types of financial institutions..
Lulz @ the “market stability regulator.” Maybe it means that they’re trying to “regulate” the economy. One would think that the calculation debate could be put to rest. One would think.
Or maybe it means that they are aggressively trying to find a stable currency, i.e., the economic fiction that there can exist a medium of exchange which is not affected by exchange. Poppycock, indeed!
I would argue that the Fed is too strong, as it is. All it needed to do in order to prevent run-ups in the housing market (or any market, for that matter) was to put the brakes on credit expansion. But the Fed’s sole purpose is to inflate, in order to concentrate economic power. Neglecting to expand credit when credit could be expanded would be a dereliction of the Fed’s duty towards its member banks (which is to say: all of them).
Of course, the Fed actively tries to manage inflation, so as to give the appearance of economic stability. But the people see inflation as an effect of rising prices. On the contrary, inflation is always and everywhere a monetary phenomenon, caused by the debasement of currency through legal tender laws in tandem with monetary expansion.
Because the people see inflation as an effect of rising prices and not as the cause of rising prices, they have no problem asking for more money to combat the pressure of rising prices. They expect the Fed to accomodate this, all the while not understanding that it is the injection of unbacked, irredeemable fiat money which causes prices to rise, in the first place.
Related posts:
- Inflation: The effect vs. the cause
- Errata
- Caplan and Expansionary Monetary Policy
- On the Demand for Money
- What’s So Bad About Deflation?
Related posts brought to you by Yet Another Related Posts Plugin.
Comments
Leave a Comment
If you would like to make a comment, please fill out the form below.
Most Viewed
- It’s Not Voluntary, and It’s Not a Contract - 5,183 views
- All Your Property Are Belong to Uncle Sam - 888 views
- Property Taxes are NOT “Rent” - 802 views
- Paulson and Bernanke are Lying - 799 views
- The Cause of the Health Care “Crisis” - 693 views