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Pastimes : CNBC -- critique.
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To: BWAC who wrote (8518)9/7/2001 6:49:49 PM
From: Thomas M.  Read Replies (1) of 17683
 
Wrong. The problem is not that the government burst the bubble. It did not in 1929, nor did it in 2000. The Fed merely stopped fueling the bubble, as it had been in 1924-1928 and 1990-1999.

And, the notion that the Federal Reserve should stand idly by while a speculative bubble economy develops is absurd. The Fed is supposed to dampen economic cycles, not increase their amplitude.

Robust competition in free and open markets for the consumer's dollar defeated inflation.

Wrong again. Price inflation has been rising around 3% for years now. This is massive debasement of the dollar's purchasing value. Over a normal human lifetime, this would render a dollar virtually worthless. And this level of price inflation caused major panics in the money markets decades ago. All that has happened is that people's standards for a quality currency have fallen.

Regardless, the structural factors you cite have absolutely no bearing on monetary policy. As in the 1920s, the Fed's money printing orgy has masked what should have been a large price deflation.

Tom
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