jct74
09-17-2015, 02:27 PM
If Only the Fed Would Get Out of the Way
Monetary policy designed to spare us from pain has instead made the system more vulnerable to a crash.
By RAND PAUL and MARK SPITZNAGEL
Sept. 15, 2015 6:42 p.m. ET
The recent tumult in U.S. equity markets has prompted many analysts to urge the Fed to postpone any increase in interest rates. This advice assumes that rock-bottom interest rates are balm for a weak economy, with the only possible side effect being price inflation. Yet it is the Fed’s artificially low interest rates that set up the economy for the 2008 crisis, not to mention previous crises.
The “doves” are right to point out that higher interest rates will lead to a repricing of many securities, aka a crash. But years of near-zero interest rates have made this inevitable. Continuing on the current course will only allow structural distortions caused by these interest rates to fester and an inevitable reckoning that will be much worse than seven years ago.
The master fallacy underlying so much economic commentary is to imagine that a handful of experts in Washington should be setting the price of borrowing money. Instead, the Fed should set markets free.
...
read more:
http://www.infowars.com/if-only-the-fed-would-get-out-of-the-way/
Monetary policy designed to spare us from pain has instead made the system more vulnerable to a crash.
By RAND PAUL and MARK SPITZNAGEL
Sept. 15, 2015 6:42 p.m. ET
The recent tumult in U.S. equity markets has prompted many analysts to urge the Fed to postpone any increase in interest rates. This advice assumes that rock-bottom interest rates are balm for a weak economy, with the only possible side effect being price inflation. Yet it is the Fed’s artificially low interest rates that set up the economy for the 2008 crisis, not to mention previous crises.
The “doves” are right to point out that higher interest rates will lead to a repricing of many securities, aka a crash. But years of near-zero interest rates have made this inevitable. Continuing on the current course will only allow structural distortions caused by these interest rates to fester and an inevitable reckoning that will be much worse than seven years ago.
The master fallacy underlying so much economic commentary is to imagine that a handful of experts in Washington should be setting the price of borrowing money. Instead, the Fed should set markets free.
...
read more:
http://www.infowars.com/if-only-the-fed-would-get-out-of-the-way/