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Non-Tech : Money Supply & The Federal Reserve -- Ignore unavailable to you. Want to Upgrade?

To: UnBelievable who wrote (44)	8/10/2002 3:16:13 AM
From: ahhaha	Read Replies (4) \| Respond to of 1379

The source should consider me because I wrote the book on all this that the authors had to study to become pseudo-qualified to make these silly statements about the functioning of the bank. And let me say right here and now, practically everything you hear about FED and related topics is false, and explicitly misleading. I haven't heard one person in 30 years who understands even the basic operations of the federal reserve system. Since the McChesney-Martin Fed we've had a continual parade of people straight out of East Coast Schools of Socialism and Keynesian Tinkering. All they have done is increase the amplitude of the natural economic cycle forcing everyone to be short term oriented. In Sept.'79 when Volcker FED decided to emphasize non-borrowed reserves as a monetary policy target I almost fell out of my chair, because they had been targeting fed funds rate, just like they are now, and it was causing under that net demand regime, a positive feedback effect that could be likened to throwing gasoline on a fire in order to put it out. The ironic thing was that fed funds still had 400 basis points to rise to reach equilibrium, an equilibrium suppressed by FED's need to create reserves to prevent the inevitable disaster of rising rates! In the final analysis by Dec '79 FED had lost control and credibility. Thank god for that because the market was no longer constrained by FED's insidious interference, an interference that they weren't able to re-assert and establish until 1995, unfortunately. Now tell me, do you think you will read that in your textbooks from your little kiddie hack econowacks?