Saturday, September 26, 2009

Inflation and the Fed

Even the Fed itself claims that part of its jobe is to keep inflation in check. This is something like the tobacco industry claiming that it is trying to stop smoking or the automobile industry claiming that it is tyring to control road congesttion. The Fed is in the business of generating inflation. It might attempt to stop the effects of inflation, namely rising prices. But under the old definition of inflation--an artificial increase in the supply of money and credit--the eitnre reason for the Fed's existence is to generate more, not less of it.

What the largest banks desire is precisely what we might expect any large corporation to desire: privatized profits and socialized losses. (p. 14)

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