Wednesday, November 12, 2008


This bit from Eugene Holloway aptly describes the picture of our government, the few who presume to speak for society rather than defend individuals, as they try to control what is beyond control.

Recent decades give ample evidence of the disastrous futility of the Fed’s attempts to use its crude tools to repair the damage of its own previous actions. Injections of liquidity to stop the meltdown in the wake of the failure of Long Term Capital Management fueled the internet bubble. Injections of liquidity to avoid a market crash when the internet bubble burst fueled the housing bubble. Now, following the bursting of that bubble, the Fed is making historically huge amounts of credit available to keep the economy afloat. But the size of each of the bubbles grows progressively. If this were only a game of whack-a-mole, it would be amusing. But money is ubiquitous, and whatever moves the Fed makes can, and do, affect anyone and everyone. The human consequences of Fed-generated boom-and-bust cycles can be, and usually are, tragic.

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