Even inflation within the Fed’s acceptability range - 1% to 2% per year - can destroy the currency and wipe out savings over time.
Reader Kartik Ariyur emailed the following link:
http://mwhodges.home.att.net/inflation.htm#1800
It provides excellent graphs and statistics that demonstrate the ravages of inflation.
We owe it all to President Franklin Roosevelt’s New Deal inflationary policies and his transformation of the Federal Reserve System in 1934. Since then, generations of students have been taught that a small cadre of intellectuals on the Federal Reserve Board are smart enough, and well informed enough, to manage the economy.
This is classical socialism, as first visualized by Henri de Saint-Simon and Auguste Comte in the early decades of the 19th century. In that paradigm, individual consumers and businessmen lack the necessary intelligence and understanding to rationalize and harmonize the economy in order to create full employment and maximum output efficiency. Only councils of intellectuals and technocrats possess sufficient intelligence and understanding.
Voila, the Federal Reserve Board, officially consecrated, under the gospel of Keynesian economics, for that role by the Employment Act of 1946.
Among the notable results of that gnostic faith are stagflation in the 1970s, the 1987 stock market crash, the dot.com bubble of the 1990s, and our current subprime meltdown.
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