Half the actions they took to ‘save’ the system were probably avoidable had they not been beholden to the banksters who in turn own the congress via lobbyists and contributions.

There are more open questions as to what they have been doing and why, the rationale, then answers.

Will they be under ‘exigent’ rule forever?

Saturday, November 28, 2009
The Fed’s Zero-Interest Rate Is Designed To Empower Central Banks

From the Mises.org:

The zero-interest-rate policy of the Fed is sold to the public as a benign economic rescue in the public interest. The stark reality is that this policy is a disguised tax implemented by the Fed. It takes income from savers and hands it as a subsidy to borrowers. It also facilitates and funds the fiscal deficit policies of central government. Such a well disguised tax is a boon for governments. The cruelest tax of all is this 100 percent tax on interest income, disguised and rationalized as “good” policy.

The zero-interest-rate policy deserves closer scrutiny. Would a saver willingly agree to an economic environment of zero interest rates? Certainly not. Would a debtor prefer a zero interest rate? Absolutely. The saver and the debtor would, under normal, willing-economic-participant conditions, negotiate a “price” for the use of money saved. That price for the use of funds is interest.

The central bank enters the negotiation between saver and borrower, and by counterfeiting money it destroys the negotiating base of the saver. Counterfeiting money through policies of unlimited liquidity provision is a “price control” over interest rates, instituted to force interest rates down and eventually spiral them downwards out of control to zero. The interest income of the saver is eventually taxed to extinction at zero interest rates.

It is basic economic theory that price control actually reduces the availability of the item subject to the control. It should therefore come as no surprise that available credit is falling despite unrestrained liquidity provision at zero interest rates. Banks have no direct cost implication when they hold funds at zero (apart from opportunity cost). Thus there is no direct cost penalty for doing nothing.

Not exploiting a lending opportunity in a high default-risk environment, where the margin between a zero-interest cost of funds and the lending rate is insufficient to protect bankers against default risk, is an entirely rational choice for bankers. While the intended consequence is to increase the availability of credit, the ultimate “zero-rate” intervention actually reduces credit availability. One wonders how significant this unintended consequence would be in the absence of Cash for Clunkers, the now-expanded subsidy policy for housing purchases, and the constant Fed, Treasury and Federal Housing Finance Agency support for Freddie Mac and Fannie Mae. We shall find out when fiscal deficits can no longer fund such excesses.

You have nothing to compare it to. Who knows what the economy would have turned into if inflation wasn’t skimming (taxing) the economy at 3% – 5% per year. If you compound that wealth and put it back into the pockets of American citizens then maybe you will begin to get an idea of what people have lost over that time.

For one thing you probably wouldn’t have to borrow money to own a home. At least not in a significant way. That was what it was like in the 40′s. Also, the wives of the country could probably stay home and raise the kids (child rearing is a wealth intangible but the state of today’s kids shows its value) as opposed to almost being forced into the workforce in order to put a roof over their (smaller) family’s head.

How many people can afford multiple children these days? That is another effect of the hidden tax

Here is an interesting read on the effects of the work of people like Greenspan. It wasn’t the one I was looking for but I picked an older article to show that their work is entirely predictable:

….and once again this is yet another article that shows that there were many around that did see the housing bubble and its potential effects:

Pop Goes the Weasel
Greenspan and the Housing Bubble

“The worst is the folks at the Fed clearly believe the bogus stress tests were a meaningful exercise. That alone should disqualify them from getting a bigger role in bank supervision. And if you read their pronouncements, they plan to continue to use them, and have the process run by….monetary economist! Help me! Bernanke also conveniently ignores the fact that the rally might also have a wee bit to do with the fact that he threw a bit over $1 trillion at the markets, as announced in mid-March.”

-Karl Marx
Communist Manifesto

Furthmore, check out the load of crap they put on their homepage:

“The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.”

I have a causation issue? and they don’t???

I am saying if the Fed is so bad for the country, then how the hell did we get to be so good?

I didn’t say the Fed CAUSED these things, but it apparently didn’t STOP them, and PERHAPS it even helped to enable them.

Where is their causation? Where is the evidence that the Fed has harmed this country or the economy?

I give up. Believe what you will.