This article was taken from Forbes.com and discusses the how the Federal Reserve manipulates the economy, often in a negative or inefficient way. The article critiqued the actions of the Fed harshly at times. The Fed can influence the economy greatly at times by flooding the market with funds in circulation. This makes it possible for people to spend more money in a attempt to boost the economy. People are able to spend more money because more money will be available to loan out from banks. It seems the Fed often gets over involved in its manipulations. Instead of giving slight help in the desired direction, manipulation is often pushed too far and end in failure. The Fed should decrease its involvement in the market and only step in when things are heading in the wrong direction.
The goal the Fed tries to achieve in the short term in an increase in employment, the methods they use may prove results at the time but the Fed is decreasing the value of the dollar by 2% each year. 2% may not seem like much but over time the dollar will lose much of its worth.
The federal banking system has been messing up a lot lately, and the financial crisis of 2008 emphasized this. Interest rates have been far too low since then, and the 2% decrease of the value of the U.S.D. will only make the United States' economy hurt badly in the long term.
ReplyDeleteThis article sheds light on the abuse of power that the Federal Reserve practices.
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