the idea of money is crazy

[bu villain]

so by your guys logic, FED created in 1913, was supposed to stop run on banks, and panics. Since then we have had

Great Depression
Great Recession 2008
.COM Bubble 1998-00
Bush SR. Recession of early 90s
Reagan Recession
Carter Recession, 20% Inflation

AND 20 OTHER RECESSIONS. Wow, theyve been doing a GREAT job.

No the Fed can't stop panics, runs on banks, recessions, booms, or busts. They can only lessen the pain and severity of them.

You need to look at Quantitative Easing, currency manipulation. The FED has caused the stagnate environment we are in now, by propping up banks and businesses (under Bush and Obamas blessing). The FED was enacted to prevent crashes, it doesnt stop them, and whats worse, they hinder the recovery. The FED has kept interest rates far below market norms........why?

I will not defend every move the Fed has made because everyone agrees they make mistakes, including the Fed chairs. But having a Fed is better than the alternative. I actually think keeping the interests rates low was necessary. Before 2008, the banks were lending too freely. After the crash they weren't lending hardly at all. The artificially low interest rates have unfroze the credit markets so that we are no getting closer to a reasonable place. We're not there yet of course.

The FED creates the booms and busts, because they control our monetary policy. We were FAR better off before the FED, we would be FAR better off without a central monetary dictator. Interest RATES HAVE TO GO HIGHER

No, they don't create booms and busts. Those are an inherent part of capitalism and we had more severe ones before the Fed was created. I agree interest rates have to go higher and there is nothing the Fed can't stop that even if it wanted to. We already see it happening even though the Fed says it won't change its QE policy until unemployment is down to 6%. I guarantee that a year from now, interest rates will be higher than they are today even if there is a QE3.

[Vteckidd]

No the Fed can't stop panics, runs on banks, recessions, booms, or busts. They can only lessen the pain and severity of them.

not true, give specifics. Their policy has caused the recessions, not prevented them, or kept them from happeneing. Im not sure you know how the stock market, bonds, interest rates and CPI work. Not being snooty, just the truth. I dont know how you can claim the FED isnt responsible when they control interest rates, which is lending, and control monetary policy......

But having a Fed is better than the alternative. I actually think keeping the interests rates low was necessary. Before 2008, the banks were lending too freely. After the crash they weren't lending hardly at all. The artificially low interest rates have unfroze the credit markets so that we are no getting closer to a reasonable place. We're not there yet of course.

not true at all. keeping interest rates low IS THE PROBLEM. no one saves, so you combat TOO MUCH LENDING by having........MORE LENDING????

What happens when interest rates are kept lower than the market wants? does saving happen?

No, they don't create booms and busts. Those are an inherent part of capitalism and we had more severe ones before the Fed was created. I agree interest rates have to go higher and there is nothing the Fed can't stop that even if it wanted to. We already see it happening even though the Fed says it won't change its QE policy until unemployment is down to 6%. I guarantee that a year from now, interest rates will be higher than they are today even if there is a QE3.

Not true x3. the great depression and great 2008 recession were the worst we have ever had, and was under the Feds watch. -1 point

The fed prints money, it directly controls interest rates.

[bu villain]

not true, give specifics. Their policy has caused the recessions, not prevented them, or kept them from happeneing. Im not sure you know how the stock market, bonds, interest rates and CPI work. Not being snooty, just the truth. I dont know how you can claim the FED isnt responsible when they control interest rates, which is lending, and control monetary policy......

I keep repeating it but it doesn't seem to be working. Perhaps caps lock will help...THE FED CANNOT PREVENT RECESSION, DEPRESSION, BOOMS, BUSTS, OR PANICS! They aren't responsible because they aren't Gods. There are global markets, economic conditions, and human psychology involved. You can't force anyone to borrow money no matter what the interest rates are. You can't force banks to lend money either. You can't force people/companies to invest their money wisely. How exactly do you think the Fed could have prevented the Tech bubble?

not true at all. keeping interest rates low IS THE PROBLEM. no one saves, so you combat TOO MUCH LENDING by having........MORE LENDING????

The problem in 2007 was too much lending. The problem in 2010 was not enough. They are fighting the 2010 problem, not the 2007 one.

What happens when interest rates are kept lower than the market wants? does saving happen?

Yes savings happens just at a lower rate. But will live in a consumer driven economy so to get it humming again, we want spending, not saving.

Not true x3. the great depression and great 2008 recession were the worst we have ever had, and was under the Feds watch. -1 point

There are plenty to choose from so I'm not sure what criteria you are using to say 2008 was the worst. The 13 Worst Recessions, Depressions, and Panics In American History - 24/7 Wall St.

Also while technically the Fed existed during the Great Depression, we were still tied to gold which severely limited their ability to do anything about it. Once they disconnected the domestic market from gold in 1933, they were able to do more. Remember, I'm not claiming the Fed has total control over the economy.

The fed prints money, it directly controls interest rates.

Directly influences but does not directly control. If the US lived in a bubble then you would have a stronger argument. The thing is, borrowers and lenders can always go to the international markets. That's why I will not invest in Treasuries right now, no yield. Not sure why we are discussing this aspect though because I never disagreed they could influence interest rates. In fact, it is one of their primary purposes.

[Vteckidd]

I keep repeating it but it doesn't seem to be working. Perhaps caps lock will help...THE FED CANNOT PREVENT RECESSION, DEPRESSION, BOOMS, BUSTS, OR PANICS! They aren't responsible because they aren't Gods. There are global markets, economic conditions, and human psychology involved. You can't force anyone to borrow money no matter what the interest rates are. You can't force banks to lend money either. You can't force people/companies to invest their money wisely. How exactly do you think the Fed could have prevented the Tech bubble?

Cheap money

The problem in 2007 was too much lending. The problem in 2010 was not enough. They are fighting the 2010 problem, not the 2007 one.

So , what is the perfect amount of lending then? LEND too much= BAD, lend too little= BAD Why do people lend? What affects it? What causes it? I dont think you understand the concept.

Yes savings happens just at a lower rate. But will live in a consumer driven economy so to get it humming again, we want spending, not saving.

LOL

Spending is what the problem is, we need high interest rates , not lower. Saving is what is needed, not spending. ECON 101

There are plenty to choose from so I'm not sure what criteria you are using to say 2008 was the worst. The 13 Worst Recessions, Depressions, and Panics In American History - 24/7 Wall St.

I needed a COMMA, i meant the 2 worst economic problems we have had, have been DURING the FEDs watch.

Directly influences but does not directly control. If the US lived in a bubble then you would have a stronger argument. The thing is, borrowers and lenders can always go to the international markets. That's why I will not invest in Treasuries right now, no yield. Not sure why we are discussing this aspect though because I never disagreed they could influence interest rates. In fact, it is one of their primary purposes.

Correct, except natural markets would set interest rates, not the artifical central bank.