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Politics : Ask Michael Burke
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To: BGR who wrote (72283)12/23/1999 2:31:00 PM
From: Freedom Fighter  Read Replies (2) of 132070
 
BGR,

>>If the Fed didn't make three hasty rate cuts, there would perhaps be a lot of former middle-class US citizens as well.
So, the policy error, perhaps, was post the 1997 crash when it came to the S.E. Asian economies. The Fed needs to be applauded for its fine performance.<<

>>(which averted a post 87 depression as well as handled the S&L crisis pretty well)<<

You fail to appreciate the "chicken and the egg" aspect to this. Without prior easy credit (fiat) we would not have had those excesses to begin with.

If you give a heroine addict a fix and make him feel better for a while are you really helping him?

He will need another fix (and perhaps a bigger one) down the line.

Of course "cold turkey" is difficult. But the idea is to avoid the excesses to begin with and not have to inject the heroine as a fix. That this Fed has been in almost regular bailout mode since 87 is saying something even if a meltdown has been averted so far. (87, 90s banking, Mexico, Asia, US capital markets) Each crisis has been met by the flood of paper and taxpayer bailout.

No one has said that the pre Federal Reserve system with its partial hard money standard was correct or good. But the Fed was/is a bandaid on a poor system that remains poor.

Wayne
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