When people talk about the economy, they generally focus on government policies such as taxation and regulation.
For instance, Republicans credit President Trump’s tax cuts for the seemingly booming economy and surging stock markets. Meanwhile, Democrats blame “deregulation” for the 2008 financial crisis. While government policies do have an impact on the direction of the economy, this analysis completely ignores the biggest player on the stage — the Federal Reserve.
One cannot grasp the economic big-picture without understanding how Federal Reserve monetary policy drives the boom-bust cycle. The effects of all other government policies work within the Fed’s monetary framework. Money-printing and interest rate manipulations fuel booms and the inevitable attempt to return to “normalcy” precipitates busts.
In simplest terms, easy money blows up bubbles. Bubbles pop and set off a crisis. Rinse. Wash. Repeat.
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
2 comments:
Good article
Thanks Joe
The Fed prints money (types it into a computer screen account) and buys the US Bonds, which nobody in their right mind would ever buy after the August 20, 1971 event which ended the Bretton Woods Agreement.
Then the Fed lies about all of the economic data the rest of us use to gauge the safety of the markets.
Then the Fed dumps paper gold onto the COMEX to convince the public it is not money.
The world is a mess.
All because of Woodrow Wilson and the 1913 Federal Reserve Act.
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