Friday, January 27, 2012

The US Fed Continues To Be Reckless Promising Extremely Low Interest Rates Until 2014


Chairman Bernanke Please Resign

Bernanke should be impeached or resign. Bernanke is a poster child for what is wrong with economics today: Lack of understanding fundamentals of economics. The short-term interest rate is too important an economic price to be so brazenly manipulated by a central bank. It is high time for substantial reforms of central bank policies to prevent this in the future.

The Fed Caused The Great Depression With Super Low Interest Rates

Not only is the Fed one of the major culprits of the Great Recession because they did not stop the deteriorating lending standards and they kept the short-term interest rate too low for too long thereby fueling the speculation.

Money Should Never Be Cheap

And the Fed continues to fuel speculation with cheap money; to aid and abet politicians in their reckless accumulation of government debt; and to deprive investors of government bonds or savers or banks of reasonable returns.

As a minimum, any reform of interest rate policy should contain a formula such as that the short-term interest rate has to be above the inflation rate, always. Sounds too simple? Sure, you do not need a professor from Harvard to implement it. J

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