Fed urged to control asset bubbles...yeah, right!

The Fed is being urged to be more aggressive in controlling future asset bubbles. Fed governor, Frederic Mishkin, gave a speech May 15th suggesting the Fed should use its regulatory powers "aggressively and pro-actively to limit the threat from future asset price bubbles." The Fed could eliminate asset bubbles all together if the Fed simply disappeared. Of course, that is a pipe dream. However, it's hilarious to see just what a bubble the Fed governors live in. They are the ones who cause asset bubbles through excessive monetary and credit creation. Yet, Mishkin is calling for agressiveness in controlling future bubbles? It's simple: stop increasing the money supply!

Unfortunately, we live in a Keyesian world dominated by central banks. Our 95-year experiment in central banking has been disastrous from the beginning, as the Austrians knew it would. The dollar is worth about five cents compared to the dollar of 1913. And it keeps losing value every day. Does it matter to the Fed? Not really. As long as its member banks, and those deemed to big to fail, continue to receive fresh injections of cash to remain solvent, everybody's happy; except you and I who pay the price down the road in the form of higher prices and decreased purchasing power. If you are granted a legal monopoly to print money, why would you stop?

 

Published Sat, May 17 2008 2:12 PM by libertyboom