Here we go again. When Allan Greenspan was Fed chief he held the Fed rate to almost 0 percent for two years. This supposedly was to allow liquidity, allowing easy credit for everyone. The problem is that we don’t have a liquidity problem, we have a debt problem.
When Bernanke was Fed chief he followed Greenspan, dropping the Fed rate to near 0 percent since 2008. All of the Keynesian economists follow the theory that having high liquidity increases growth, thus increasing employment. Unfortunately, this never happens.
The public has had to put up with failed economic policies for 20 years, leaving America with a failed economy. Now the Fed has a new chief, Janet Yellen. She will maintain the same failed economic policy that we have had for years. Why should anyone want to continue this policy? We should replace all of the Keynesian economist in Washington with Austria School economists, allowing the economy to flourish.
The Federal Reserve is not part of the federal government. It is a rouge outfit, has never had an audit, and America would be better off without the Fed. Its original mandate was to maintain a strong dollar, and provide elasticity to business. Elasticity meant when high growth occurred liquidity was increased to allow for higher transactions, and when low growth occurred the Fed would reduce liquidity, so inflation would not occur. Well, the Fed does the exact opposite. It increases liquidity when we have high growth, and increases liquidity more when we have low growth.
This is why our future looks very dark, as inflation is increasing. It is ready to explode, thus impacting every American.