03 October 2012

Why Print Money?




They are probably right. It is telling that neither Obama nor his Republican opponent has offered much of a plan to spur the economy, at least in the short term. So far as anyone has any short-term impact on the economy, it is the Federal Reserve, and even it is limited in what it can do. As it has been said, the Fed can print money, but it can’t print jobs. [Emphasis added.]

Well, if all the fed can really do is add to the stock of currency (well, that and not enforce regulations), then pray tell what, exactly, is the point of having it?  If it’s not going to do anything save debase the currency and in so doing ensure that banksters get first dibs on the redistribution that inevitably accompanies each round of inflation, then why have a central bank?  Oh, wait…

3 comments:

  1. Steal from the poor give to the rich this is what the fed does. The those belonging to the federal reserve club like JP morgan and Goldman sachs get the free money while everyone else get higher prices.

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  2. As much as I hate current FED policies I think the tendancy to blame the FED for our ills is a bit overstated. To nitpick a bit the FED does not print money. The FED does purchase US govt. debt instruments effectively creating money out of thin air. The thing is that the FED can set the discount rate to zero and inject mony like made, but they cannot make anyone what to borrow. The underlying problem is the deficit caused by the US congress and a populace who want something for nothing. If we had no deficit and a much smaller national debt we would not even be talking about the FED.

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  3. @tg- I don't think the fed is to blame for all our ills. I do think that most of our economic ills can be traced back to it, and that we would be better off without a central bank.

    Now, the populace has always something for nothing. That has always been the dream of mankind ever since man existed. What the Fed does is enable the illusion that we can have something for nothing. Without the loose monetary polices of the Fed, and without the Fed's willingness to monetize federal debt, we likely would not have a deficit at this point, and we'd likely have a considerably smaller federal debt.

    So, would the government be perfect without the Fed in place? No. But would government problems be as likely or as severe without the Fed in place? Probably not. So, basically, the Fed is all downside and no upside as far as federal fiscal discipline goes. However, it does a pretty good job of enriching the banksters.

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