Awareness for the archive.
To: Texbanker who wrote (16826) 4/30/2010 12:00:23 AM
From: ahhaha of 16827
FED was created to act as the lender of last resort when it was realized through the Panic of 1907 that a private individual, individual entity, or group of individuals or entities, couldn't contain a large scale financial crisis. Initially, that was its only purpose. During and after the '30s depression it gained more powers by exercise and by law.
None of those changes brought the FED into its current form. The current form is primarily attributable to the swing to academic oriented applied Keynesianism that was part of Kennedy and Johnson admins philosophy of engineered prosperity for all. The idea behind it is to guarantee eternal, unpaid for, prosperity. You can see who pays though if you check a long term chart of CPI.
During the financial crisis of 2008 we experienced a brief respite from the eternal wonderfulness of the somebody else pays society to natural classical economic equilibrium. Prices started falling. It was great. It felt like the '50s again, or like the '80s somewhat.
FED economic engineers can't have that. It threatens the power of government, and therefore, their control, even though their connection to government is nebulous. FED has got it all figured out that economy works best with a little inflation. Problem is, that view is dead wrong.
Proof: There's no inflation now, that is, rorocGPL = 0, but rocGPL>0, as it has been for the last 50 years since the advent of Keynesian engineering. In 2008, for several months, rocGPL<0. FED is breathing a sigh of relief because they have finally got rocGPL>0. Eventually, they'll be able to open Temporary and gain control over monetary policy. Control means being in the position to apply more Keynesian engineering to keep the economy pumped up. Pumped up means corporations are meeting as I write this to raise prices. FED wants that.
Nothing whatsoever has been learned over the last 50 years. Nothing was learned from the bout with inflation in the late '70s. For example, in spite of the million words I've used to explain the whole enchilada, no one on this board can regurgitate it, and no one on FED even knows it. That's true of Volcker who never knew what was going on while he presided over the debacle, and still doesn't. True of AG too, who claims these crises inevitably occur every hundred years and there's no way to prevent them.
So if no one can learn these things, necessarily given the general stupidity of the pseudo academics at FED, given the morons in Congress, given the narrow minded one dimension self serving idiots at the universities, given the aversion of corporate banking entities to anything in their interest, you know another crisis is coming. And the crisis will be caused by inflation, +rorocGPL. |
