Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (138829)	10/14/2013 6:10:53 PM
From: RetiredNow	Read Replies (2) \| Respond to of 149317

Many bubbles are independent of the Fed. But most of the bubbles in the years since the Fed was created were caused by the Fed itself. Think about it. When you manipulate the price of money and credit, by definition you are creating distortions that will correct in the future. Since no one can predict the future, Fed manipulations oftentimes cause bubbles. Then they have the temerity to suggest they are the solution to the volatility they themselves created. The crash of 2001 was caused by the easy money decade of Alan Greenspan. The Internet Bubble was another proximate cause. Those combined created a massively huge bubble. The housing bubble of 2006-7 was purely a Fed created bubble. When private industry blew up, they assumed the bad debts of the housing debacle. Now we have a Fed induced sovereign credit bubble, which most assuredly will also blow up. Credit and monetary instabilities are far more damaging and monstrous than any bubbles or instabilities created through Capitalism and market forces. The reason is that when the price of things is manipulated, rational people simply cannot adequately calculate risk and return. Then when the bubble bursts in a Fed manipulated environment, the solutions put the pain on the people who didn't create the mess, while the bad actors, the banksters, get off scott free. In an unmanipulated market, you may get bubbles, but they are usually not as severe as credit / Fed bubbles and the people who take the risks in those bubbles are the ones who feel the pain. Capitalism is the fairest system every created and it is also the one that, over the long run, has the highest probability of maximizing economic growth. Central Economic Planning, Socialism, and Communism, have always proven in every instance in economic history to be inferior models that lead to stagnant growth, cronyism, unfairness, and loss of liberty.