NY Times' Meltzer Calls for Fed To Stop Causing Inflation May 14, 2009
Posted by Jeff Nabers in : Money , add a comment
The Fed’s activities for over a decade have been very focused on creating inflation (an increase in the money supply). Allan Meltzer wrote a great article the other day summarizing how inflation isn’t the solution to our economic problems… it’s the cause.
He revisits how Fed chairman Paul Volcker came on the scene and decided to directly combat the economic problems in the 70s by simply (more…)
When the economy attacks: Fed fights back with toy gun December 16, 2008
Posted by Jeff Nabers in : Money , add a comment
Today the Federal Reserve lowered their key rate to 0%. Huh? How does our economy work when money is lent for no interest? Well, they technically lowered the key rate to a range of 0% to 0.25%. This is the first time the Fed’s key rate has been this low ever. Without getting into a long, complex examination of this let’s take a very simple look at our economic problems:
- Consumers spent more money than they had by borrowing and going into debt
- Lenders lent money to consumers who did not have the capacity to repay the loans
- The government spent more money than it had by borrowing and increasing debt
- Lenders lent money to the government who does not have the capacity to repay the loans
If we had a free market, (more…)
Feedburner Subscribe
