The Fed Is Bedeviled by Keynes’s Paradox – Bloomberg

(See the Bloomberg article on Fed interest rate manipulation.)

The Fed (your totalitarian financial Gov Sponsored Enterprise) forces interest rates artificially low, which means you can make no money by lending your savings to banks and other corporate entities through savings accounts or bonds. So, people “chase gains” in the stock market. It also means that borrowing money is so cheap that corporations take out tons of debt, buy back their own stocks, show great Earnings-per-Share (now with fewer outstanding shares) which make it look like they are super healthy. The stock market indices go up without any true valuations or growth to support them, and the bubble becomes ripe for major correction. Thus, the Fed’s policies to juice the economy end up creating instability, robbing people of income and stable investment avenues, and worse of all, the credit expansion/money printing erodes the value of the dollars that people are able to save. Central planners! My favorite Hayek quote: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

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