They should not be granted more authority. The fact that they exist and are believed to make downturns “not likely to happen” leads to an overly optimistic and ignorantly un-diligent general attitude among the people at large. The presence of the Fed causes a false sense of security. The fact of the matter is, these folks do not know as much as too many people give them far too much credit for knowing.

Expand Fed Control?

Acting with wisdom.

Fed actions create federal default risk.

Anatomy of a credit/housing market murder.

The bubble economy, the dollar or both?

Ben Bernanke in 2005: “No housing bubble to go bust.” Nice call Ben.

Who exactly should we be listening to?

“To further inflate an unsustainable boom with additional cheap Credit guaranteed only more problematic financial fragility, economic imbalances/maladjustment and resulting onerous adjustment periods. The astute were adamantly against the (Benjamin Strong) Federal Reserve’s efforts to actively manage the economy (and markets) in the latter years of the twenties, fearing that to prolong the reckless Wall Street debt and speculation orgy was to invite disaster (the “old timers” had witnessed many!). History proved them absolutely correct, yet Historical Revisionism to varying extents has been determined to disregard, misrepresent, and malign their views and analytical focus. Bernanke’s analytical framework of the causes of the Great Depression is seriously flawed.“ - Doug Nolan, Credit Bubble Bulletin, April 4, 2008

Filed under: Social Mood, Economics