Article Image

IPFS News Link • Federal Reserve

Who Needs the Fed?

• https://www.lewrockwell.com, Mises.org

Perhaps nothing in financial news receives more attention than an announcement from the Federal Reserve. About eight times per year, the Federal Reserve's Federal Open Market Committee meets to formally decide and announce its plans for monetary policy. Every announcement has the potential to cause a rally, or a rout, in financial markets.

It makes sense that a mere announcement from the Fed has the power to move markets in a big way. The Fed wields vast power over interest rates, bank regulation, and the money supply. When it comes to policies that affect the everyday lives of nearly every American—and even countless people outside the United States—it is likely that no government institution is more powerful than America's central bank, the Federal Reserve.

Yet this institution works largely in secret, has never been audited by Congress, and is virtually never challenged by anyone in Washington or in the legacy media. In this era of eroding public trust in Congress, the presidency, the media, and even the military, it's quite remarkable that the Federal Reserve faces so little scrutiny.

Much of this is because the Fed's supporters have for decades so successfully spread myths about how the Fed provides stability and prosperity.

A closer look at the reality of the Fed reveals that the Fed does not benefit ordinary people nor does it make the economy more stable. Instead, the Fed was the primary source of the forty-year highs in inflation consisting of sharp spikes in food, housing, healthcare, and transportation prices. In many cases, rising prices outpaced wage growth, meaning that millions of American households—mostly those with lower incomes and fixed incomes—have experienced negative real income growth in recent years. Meanwhile, Fed policy has also driven inflation in real estate and equity prices, which has padded the portfolios of wealthy households, banks, and governments.

The Fed may claim it is expertly managing the economy, but in 2024, it is still doing what it has been doing since it was established in 1913: creating more economic instability with seemingly endless crises such as we saw in 1953, 1957, 1960, 1969, 1973, 1980, 1981, 1990, 2001, 2008, and 2020. The best we can say about the Fed is that it failed to prevent the Great Depression, the 1970s stagflation, and the Great Recession. But the Fed didn't merely fail to prevent all this. The Fed created these economic disasters.


ppmsilvercosmetics.com/ERNEST/