Jolly - I just pasted that excerpt, but I can't say for sure what the real truth is. The Fed website doesn't help much, and the Federal Reserve Act isn't exactly clear, either. The lack of clarity from government sources lends credibilty to the theory though.
I was thinking: Doesn't the fed only have one tool - monetary policy (i.e. interest rates)? The main goal of the fed since the 80's has been to control inflation. If the money supply got out of control, wouldn't you expect inflation? In any event, they did a great job on the inflation front. They've shot their bullets now with interest rates and are now left with blanks. What's left -> fiscal policy. Tax and Spending by the gov't. If the economy gets better/worse, don't blame the feds, blame your politicians.
Is it really so? You say there is no inflation. We may not have the inflation typical of the late 1970's early 1980's, but we DO HAVE inflation. Its just been confined to certain groups. The inflation is there. It just floats around from asset group to another.
ofcourse there is inflation (housing for example) but overall it has been kept in check and very reasonable levels. edit: could it also be argued that housing shot up due to the reduction in the capital gains tax - fiscal policy - during clinton's presidency.
Yes and no. Monetary policy is obviously their domain. The tools that they have at their disposal are: moral suasion (1996 "irrational exuberance" speech) Fed funds rates/Discount rates margin requirements control of fractional banking system -------------------------------------------- AAA, that was one funny post! We need more monkeys (rally monkeys that is!)
we don't have inflation in finished goods. Another poster mentioned China. Did you know that Mexico is now worried that China is taking jobs away from them as factories are moved/built in China?? Average person makes $40-100 per MONTH. How can any manufacturing firm compete with that. Main problem here is overcapicity. With all that cheap money in the 90's, many firms built WAY too much. It's great for customers, poor business sense. How can the fed fight that?? Well, they shouldn't have given so much cheap money at that time. I think all this boils down to two main downfalls of the fed, and other associated economic advisors (ie Rubin). I think Greenspan did eventually start to believe in the high tech miracle. I also think that political pressure, in all areas of the economic and treasury branches forced their hand. Afterall, if you believe that maybe this is a new age, and if there are problems that can be easily solved in the short term by pumping out money, what harm can there be?? I think a chart of the Nasdaq answers that. Short term gain=long term pain canuck
Most Americans, if they know anything at all about the Federal Reserve, believe it is an agency of the United States Government. This article charts the true nature of the "National Bank." http://heart7.net/mcf/federalreserve.htm on PPT (Plunge Protection Team) enactment and how it effects the markets in conjusction with the Federal Reserve ...The PPT has enormous power and if it chose to make full use of that power it could certainly push the stock indices considerably higher. The Fed, a member of the PPT, has an unlimited ability to create dollars, so if it really wanted to the Fed could print enough currency tomorrow to buy the entire stock market. (There is, of course, a practical limitation to the Fed's currency-creating ability in that the more dollars it prints the weaker the US$ would become.) ... http://www.kitco.com/ind/Saville/july052002.html some older info on PPT/FED from 1997 http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm Josh
I should have said the _transistor_ radio. The modern day equivalent is the cell phone - some people are even replacing their home phones and just having a cell phone for everything. I recently heard that 1B people have cell phones - can that be right? That's 1/6 the worlds population? nitro
Hasn't anyone ever read The Protocols of Zion or the Wizard of Oz? I think many of your questions can be answered in theses works.