Thursday, November 5, 2015

AN UNDENIABLE FACT, THE FED IS THE PROBLEM!..........

AN UNDENIABLE FACT, THE FED IS THE PROBLEM!

The problem for the Federal Reserve is that getting caught in a liquidity trap was not an unforeseen outcome of monetary policy, but rather an inevitable conclusion.

As shown in the chart below of GDP, inflation, and interest rates, each time the Fed has intervened with monetary policies it has lead to lower rates of economic growth and lower rates of inflaton and interest rates. As stated, the current low levels of inflation, interest rates, and economic growth are the result of more than 30-years of misguided monetary policies that have led to a continued misallocation of capital.



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