Fed Confused on Policy

Virtually ALL of the the decisions concerning money supply and “regulation” are being made in the private sector which is devoted to one thing by mission and by intent: transfer of wealth to the big dogs in the private sector. This clearly government function, as specifically expressed in the U.S. Constitution has been abandoned by government and usurped by the private sector.

By allowing tainted money into the political system, actions that had been plainly illegal, immoral and unethical have become a way of life, legalized by laws passed to satisfy legislator’s obligations to lobbyists. Obama’s call for reigning back the forces of money from the private sector is a call to arms and a call for alarms — to regulate and disclose the billions of dollars spent by credit/financial industries, oil and gas, coal, drugs, healthcare and crime (yes, crime because close examination shows that some private sectors will ONLY make money if the jails are full).

The purpose of government — to be the referree between capital and labor in a market allowing forces of supply, demand and innovation to determine outcome — has been abandoned and must be re-asserted. If not, we become a third world country where the rich live in electrified bunkers with their own security staff and the rest of the population remains hopeless poor and in debt. The risk of violent revolution, food riots and knee-jerk policies generated from fear or anger will be the rule rather than the exception. This is hardly the result intended by the framers of our constitution.

As the comments indicate, the Fed policy-making apparatus is in tatters.

  • It lowers the Fed overnight rate and interest rates go up — something that was thought impossible by many people. 
  • It confronts hyper-inflation with a mixture of mentioning how serious the issue is and then lowers rates again, which we all know means increasing the money supply and increasing inflation. But then lenders still refuse to give loans to small business, homeowners and other key parts of the credit cycle that spur the economy. 
  • The plain fact is that the Fed is not having much effect at all on anything. 
  • It missed the opportunity to regulate and increase its influence to thwart the bubble in housing because politically it was expedient to do so in a Repiublican administration. 

We all pay the price as the economy and our society commences the wrenching process of remaking itself with a solid foundation of productivity, more even distribution of purchasing power, less impulse purchasing, more saving, and the prospects of slower growth and recession here and abroad.

The FED is diminished, probably permanently. Up until now nobody has addressed the issue head-on that neither the Fed nor the U.. Treasury, nor the Bureau of Engraving and Printing are having much impact on money supply, interest rates, prices or economic growth.

Virtually ALL of the the decisions concerning money supply and “regulation” are being made in the private sector which is devoted to one thing by mission and by intent: transfer of wealth to the big dogs in the private sector. 

Pianalto: Fed’s strategy compatible with low inflation rate
LONDON (MarketWatch) — Cleveland Federal Reserve Bank President Sandra Pianalto said Tuesday that inflation remains a top risk to the economic outlook, but that the Federal Reserve’s rate-cutting strategy likely wouldn’t stoke inflationary pressures. In a speech prepared for delivery in Paris, Pianalto said she finds herself in a “challenging environment” as a policymaker. “While even the core price measures in the United States are rising somewhat faster than I would prefer, and inflation presents a key risk to my outlook, I believe that the Federal Reserve’s policy strategy remains compatible with a low and stable inflation rate,” she said. Pianalto said it was important to distinguish between inflation and relative-price pressures. End of Story

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