Quote Originally Posted by bu villain View Post
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.