Yes the fed has been inflating the money supply, through various means. Open market operations, the Discount window, and Mr. Bernake's more creative methods to help the "Wall Street Investment" select. Swapping worthless paper for fresh treasury bills. Other countries also devalue so that they can remain competitive, and so on and so on, making the monetary unit worth less and less. When will it end? Probably, a currency crisis.
They have all the right info, at Mises,org; the only thing they can't tell you is when to buy or sell. That is your problem. Yet, Mises.org, is great.
The problem I have with the free market is that we will probably end up in a situation similar to before there was a central currency. In the historical context think about early Germany around the 1700's. Each prince had their own currency and one currency from one prince was not accept by another. The reason why we have money and a central bank is provide a level playing field. Ok so what is the alternative? http://www.econlib.org/library/Essays/LtrLbrty/msEdBib1.html "Furthermore, Mises knew that sound money served as the necessary core of the international division of labor and international trade mechanism. As an economist and historian, Mises realized that the gold standard was not the creature of governments, but rather had developed through centuries of expanding international commerce and trade. The gold standard was the free market's spontaneous answer, via commercial and merchant banking practices, to the international market's trade needs." Wonderful, the gold argument again. Let's again put this into context. Why did countries plunder the America's and other regions? To get gold! Because they knew with gold came power. Gold is such an arbitrary measure that those countries that mine gold would be as such an advantage to those countries that could not mine gold. I personally believe that the central bank and currencies with all of their problems and issues are the fairest way of doing commerce. What I especially like with money is that you need to keep it moving for it to be of value. Hoarding does not work, and that is good because hoarding does not do an economy good.
That's because what happens in the ACTUAL market is more often than not, without any correlation whatsoever to economic theory.
Bernanke had no other choice. He had to replace the worthless collateral with Treasuries to allow the "patient" to remain on life-support and have a chance at recovery. Remember, the magnitude of this "disease" was enormous. Every single Bank was in the hospital and dying of a cancer that was literally incurable. Had he not helped the Banks re-liquify, the U.S. economy would have undoubtedly re-visited a 1930's style Depression. (The Country's economy runs off of CAPITAL FORMATION via the banking system.) No banking system. No capital formation. No economy. It's as simple as that.
Just ban the fed. They have no right to exist; they're a private corporation owned by a few families and their progeny, and they get to play faster and looser with Other Peoples' Money than any other organization in the history of the world.
Well thats fine, and dandy, as far as it goes, and its accurate enough. However, whats the matter with spreading the access to virtually free money to include others than Wall St banks. Especially seeing that most of the ills are directly a result of their practices. If evaluated on a scale of the value they have actually created, relative to the losses they have also created, the sad facts are that Wall St banks are in the red, across their entire earnings histories, save GS. Not exactly a shining example of who to shower with rewards of unlimited access to cheap fuel, regardless of whether or not, or how dire they need it. I say, let anyone who wishes to, gain the same access to the window, on a par with IB's...if IB's get access to 50B, allow 50B to anyone else that wants it, and so on. I think its fair to say that anyone outside of IB's can do just as good a job of it, and likely better, for the money. Sure as hell can't do any worse. What they are doing now amounts to pardoning criminals before they are even indicted, and giving them vast amounts of the ammo that fueled the crimes in the first place. Doesn't exactly make perfect sense. Kinda like giving arsonists free gas cards.
What is clear is that one has to assume that people in office such as Bernanke will actually perform the best remedies. The most recent argument regarding socializing losses while capitalizing the gains perhaps needs to be restated: Socializing current investment bank/bank losses is the best cure for the total population because it is the smallest cost to society. In other words, given the financial malaise, the problem is one of optimality, not of perfection. Optimality meaning that none of the solutions are very attractive, and time is a big part of optimality. ................................................................................................ Another question becomes are the losses by Merrill, UBS, Citi and others to be socialized as well in that the investment banks/banks will be swapping out bad debt for treasuries whose cost will be borne by the taxpayers? And again, is this an optimal solution ? In other words although it seems that social taxes are being focused on the investment banks/banks, the cost is just part of doing business. After all, the investment banks/banks know all too well how important cheap capital and its availability is to the society. In other words, mistakes are made all the time, and in this instance the cost for the previous party is being paid, and overall has only been part of previous optimal solutions. ................................................................................................... So perhaps it is the inability of the media to properly describe the true reasons for events. After all, would a person not understand that when one overspends in a given timespan, one has to pay the bills.....and for those who properly saved and lived within their means should just know that inevitably that they will be taxed again for those who do not, that this issue will be in all populations, and that this is just the cost of doing business as well. ............................................................................................. Thus the logic whereby social capitalism coexists and serves as a proper label for the total socioeconomic framework.....molts into a more proper framework ? ............................................................................................. And perhaps it is technology that allows for this molting process? ................................................................................................ It is coming......it is called the INTERNET....... The INTERNET will prove to be the best governing tool ever.....and will enable better management of socioeconomics....or rather SOCIAL CAPITALISM........ http://en.wikipedia.org/wiki/Social_Capitalism
Abolish the Fed, let the market take care of it. Please, also abolish the police force, firefighters, hospitals and the military. Also stop building roads and bridges. Let the market take care of things. Free markets are always better than organizations run by the government, it's a fact of life!!!!!!!!!!