Busted: Bankers and The Global Economy

June 24, 2008

Fed Interest Rate Responsible for Inflation?

The joke of the day is CNN money’s recent article ruminating about the effect of the Federal Reserve’s low-interest rates and the creation of inflation. Low-interest rates for bank have helped the bottom lines of financial institutions. Consumers and investors have experienced little, if any, benefit.

According to the article, some think that low interest rates are at least partly responsible for some of the serious drags on the U.S. economy today, such as soaring prices of food and gas and the weak dollar. The interest rate of the Fed have nothing to do with such things at this low level of interest!

The country is fighting on two war fronts in Iraq and Afghanistan. Credit and monetary funding has been issued by the Federal Reserve on record levels. The national debt has grown exponentially since President Bush took office, which is probably his greatest legacy. The constant creation of monetary credit has thoroughly devalued the dollar in relation to the rest of the world. As a result, costs are higher. Capital value in the real estate market and economic pressure on the cost of goods continues to drive values down. This results in a contraction of the marketplace.

Wall Street and the media need to grow up. Sour grapes during tough times among people with most of the power and influence is ridiculous. Wall Street continues to find ways to make money. Scapegoating for their own benefit is exactly the situation. If you have read the information on this website, you know why the economy is in the dumper: financial and banking greed.

Most economists think inflation is here to stay. It’s likely to get worse.

Advertisements

Blog at WordPress.com.