Posts Tagged Federal Reserve

Essay Review: Great Myths of the Great Depression

Sep 2

Posted by Billy in Book Reviews, Economics, Politics | 1 Comment

I recently finished an essay by Lawrence W Reed, currently the president of FEE (foundation for economic education) of which I’ve posted briefly in the past. This short and concise essay described the ‘true’ causes and sustaining factors of the great depression. It dismantles the common thinking that the “New Deal” and FDR were solutions to the depression, and discusses the realities of the regulation, deceit, and politician-ing that went on during the depression. Solutions included FDR’s proposal of a 99.5% marginal tax on incomes over $100,000 (luckily it didn’t take), the destruction of goods and crops in an attempt to raise prices, and many more interesting debacles of political blundering that occurred, too many list here.

The essay pointed to the real culprit of the Depression and business cycles in general, bad monetary policy. This is revealed again with the current economic crisis and the Federal Reserve’s tinkering with interest rates (just as in the 20’s as a precursor to the crash). In fact, the circumstances leading up to the depression and even many of the political solutions imposed are astoundingly reminiscent of today! Do we ever learn from the past?!?! Hopefully the result will not be 12 years of drudgery in depression again… Check out the pamphlet in print here or as well available for free online here.

I give this essay a solid 2 thumbs up and recommend it to anyone. In fact, get a few copies and give it to anyone you know…

Tags: Federal Reserve, Great Depression, history

The Rise and Fall of the Dollar

Aug 31

Posted by Billy in Economics | No Comments

Mises.org Contributor Sean Malone created the following summary of the rise and fall of the US Dollar. Check out the post here.
(Click on the graphic for a big one…)

This also shows the increase in money supply (small graph in upper right, it is absolute increase). As for percentage increase, it is scary. See the below graphic on money supply increase by percentage:

money supply increase

This can be seen in a past article in the Wall Street Journal here.

Monetary policy is out of control and in the hands of politicians as it NEVER should have been, hence the need for fixed standards among other things.

Tags: Federal Reserve, Inflation

Let the F@T Lady sing? Hello Ms. Debt!

Aug 9

Posted by Billy in Politics | No Comments

Bravo! Isn’t she grand! Check out more here.

Get a unique perspective on today’s issues with the political cartoons of IBD’s Pulitzer Prize Winner, Michael Ramirez.

Tags: Federal Reserve, funny stuff, government

welcome, Neo-FDR and the Neo-deal…

Aug 5

Posted by Billy in Economics | No Comments

I am currently reading a pamphlet by Lawrence Reed titled “The Great Myths of the Great Depression.” It is scary in prophetic insight into current economic and political circumstance. Did the new deal help the depression as many assert? No sir, anything but…

How does a top income tax rate of 90 percent sound? How about the NRA (national recovery association) regulating business causing a 40% increase in the cost to do business? How about the minimum wage law throwing hundreds of thousands out of work by pricing them out of the market? or the seizing of private gold holdings and the depreciation of the dollar by 40%? Yeah, those all make logical sense to help the economy. You were right Mr. FDR, we couldn’t have done better on our own (hopefully you note the distasteful sarcasm). Maybe we just needed the challenge, otherwise it would have been too easy.

From an economics standpoint, he actually enhanced and alleviated any restraint that the cause of the boom-bust had. The federal reserve monetary policy that fueled the artificial boom was strengthened by degradation of the gold standard in favor of near limitless currency and credit market. Between minimum wage laws, social security, and poor monetary policy, he practically caused our current boom and bust!!

Up to this point, it appears we are destined to repeat the follies of the past (hopefully without 90 taxes, the thought is totally depressing. It makes me want to teach surf lessons in Mexico for cash only). Here’s an invite Mr. Obama, read the pamphlet!

Tags: Federal Reserve, Obama, Politics

Do We Need the Federal Reserve? A Case for a Free Market on Money…

Jul 29

Posted by Billy in Economics | No Comments

Keynes and other economists were particularly influential in the formation of the American central bank in the early 1900’s claiming that it is necessary to create stability in the financial markets and money supply. I happen to disagree and recently read a post on the Ludwig Von Mises Institute’s blog regarding this matter. Here are a few excerpts:

According to White, vigilant internal monitoring would be vital to a bank’s ability to weather external storms, and the prospect of failure would provide banks with the incentive they need to be prudent stewards of their depositors’ funds. Therefore, government intervention in the monetary system is superfluous when it is not destructive. The self-correcting tendency of an unregulated market for money suggests that it is time to reconsider whether we need the Federal Reserve.

…Though the Federal Reserve aims to promote monetary and economic stability, they distort interest rates, worsen inflation, and cause business cycles by printing money.

A short, interesting article, White points out some interesting tidbits for the case against central banking. I would contend not only for the privatization of banking and money markets but the return to a gold standard (or some management standard) in order to separate political powers from monetary control.

Tags: Federal Reserve, Ludwig Von Mises