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Feb2-12, 10:09 PM
P: 241
Quote Quote by Angry Citizen View Post
Do you know why the Fed is so bad? I'd really like to know, because I think most Paulites are just repeating the soundbyte.
In principle I don't think a central bank is bad, it can reduce the volatility in GDP and inflation. I have a problem with the Fed in particular, and the influences and interests behind it (particularly the banking sector). An independent agency which controls the monetary market is prone to be influenced by special interests, that's expected. Greenspan was appointed chairman because he's a neoliberal, and the same happened with Bernanke.
Aside from this, then there's the lender of last resort issue, which Greenspan put in practice and Bernanke followed. Corporations can't expect the Fed will be there to lend money when they need, there have to be other solutions, namely more regulation. Now Wall Street will go back to what it always did, certainly partly because they know there's a lender of last resort.