View Full Version : What does the Fed have to do with my daily life?

05-11-2010, 03:12 PM
Says the clueless statist!!

My response below. Add some other elements I may have ignored in my haste:

Nearly everything. The tentacles of the Federal Reserve affect nearly every economic activity in this country. The Fed's pet member banks get to dip their beaks in the Fed discount window, only to pass out loans to preferred clientele at attractive rates, essentially tipping the scales of free market competition. Take another example with the recently transpired mortgage explosion. When interest rates were 0% and lenders were indiscriminately rolling out cash to everyone and anyone, those EASY dollars were directly competing with others in their quests to buy goods, property and services. As a result, a bidding frenzy erupts as seen with the housing bubble craze and consequently, dramatic over-valuations ensued. In turn, local property taxes were skewed as well from the unrealistic price increases.

Secondly, with low interest rates your average citizen is less likely to keep their money in the bank, but they're more likely to speculate in the very turbulent stock market. Thirdly, and most importantly is the hidden tax known as inflation which erodes everyone's purchasing power, when the Fed significantly increases the money supply. Moreover, the Federal Reserves aids and abets the government in running massive deficits that the federal government cannot structurally maintain. It is essentially the enabler of our own financial ruin.