the Failure of the FED

The FED has failed to make any kind of impact on the econ­o­my.

They want to see infla­tion go down but they have no real author­i­ty to make that hap­pen.

So they con­tin­ue to do the one thing that they can do and that is to raise the inter­est rates.

Sad­ly that has not worked and it will not work tomor­row or the day after that and we could say the same thing over and over again but noth­ing will change because it appears that peo­ple do not under­stand why noth­ing is chang­ing.

Why rais­ing inter­est rates does noth­ing to stop infla­tion. 

The truth is some­thing that is some­times dif­fi­cult to hear and even hard­er to under­stand. 

When it comes to the econ­o­my some­times the sim­ple truth gets lost in the belief in things that just are not so… 

Amer­i­ca and the world have watched close­ly how often the FED has con­tin­ued to raise rates while think­ing that by so doing infla­tion can be reduced… 

The truth here is that manip­u­lat­ing the inter­est rates and believ­ing that this will cause infla­tion to go down is just fool­ish­ness. 

The real­i­ty is that all this does is to trans­fer the infla­tion from one set of peo­ple to anoth­er. 

The idea is that by increas­ing the cost to bor­row mon­ey will cause infla­tion to go down how­ev­er this is just not true. 

What is hap­pen­ing is a con­tin­u­a­tion of a failed pol­i­cy that should have been changed but because the FED real­ly has no real pow­er to change the econ­o­my all they can real­ly do is to alleged­ly to make things worse. 

Basi­cal­ly what they are try­ing to do they can’t do so they do all the wrong things in an effort to try to make things bet­ter while con­tin­u­ing to fail to do the one thing they want most.

Sound con­fus­ing well it is and the rea­son why this is true is a sim­ple one. 

The FED has no author­i­ty or man­date to be in charge of the econ­o­my or the hous­ing mar­ket or the labor mar­ket yet they keep try­ing to do the same thing over and over again while only alleged­ly doing harm… 

They say doing the same thing over and over again and expect­ing a dif­fer­ent result is insan­i­ty…

But that is exact­ly what the FED is doing… 

What can the FED do then?

They can dis­rupt the econ­o­my they can make it hard on Amer­i­cans who want to buy a home. 

They can make it dif­fi­cult on peo­ple who want to buy a new car. 

They can make it hard on busi­ness­es to be able to open a busi­ness. 

They can make it dif­fi­cult for busi­ness­es to hire new employ­ees for a new busi­ness. 

They can do all of these things that end up hurt­ing every­one while help­ing no one. 

That is what the FED can do and they are doing it well over and over and over again… 

When you make a mis­take you must be able to learn from that mis­take or you end up con­tin­u­al­ly mak­ing the same mis­takes over and over again. 

Like rais­ing the inter­est rates to try to manip­u­late the econ­o­my. 

IF the idea here is to destroy the econ­o­my by try­ing to manip­u­late the inter­est rates but fail­ing to impact infla­tion then the FED is doing that and they are doing it very well indeed but also sad­ly every­thing they are doing is cre­at­ing so many more prob­lems for every­one. 

The Peo­ple who are strug­gling will strug­gle even more just try­ing to get a job and try­ing to afford to buy food to eat and while the FED might want to con­trol the prices of food they can’t con­trol prices as much as they might want to it is impos­si­ble to do that. 

Unless what the FED real­ly wants is to see peo­ple starve and strug­gle but is that fair to say? Per­haps it is because when you con­tin­ue to make the same mis­take over and over again and then peo­ple start to suf­fer and strug­gle, well then per­haps that kind of crit­i­cism is not only deserved but must be man­dat­ed.

Which brings up a ques­tion that many peo­ple have… 

IS the FED try­ing to destroy the econ­o­my or are they just so igno­rant that they can­not see that con­tin­u­ing to raise inter­est rates over and over and over again will nev­er bring about a reduc­tion in infla­tion. 

They prob­a­bly think that there is some kind of mag­ic num­ber that will work out for them but No it will not work and the great­est rea­son why it will not work is that it is a sin­gle dimen­sion answer to a mul­ti-dimen­sion­al prob­lem that has failed to work. 

They either can­not see it or they are wil­ful­ly igno­rant of the failed pol­i­cy. 

Some have said that per­haps if the FED were to do some­thing dif­fer­ent you know like to not raise inter­est rates or to per­haps even relax the rate. 

Sad­ly though it appears to many that the FED is blind to all the dam­age they have have alleged­ly done and will con­tin­ue to do that dam­age all the while believ­ing that this time it will be dif­fer­ent you know this time when we raise the rates infla­tion real­ly will go down… 

Yes, just keep on putting those rates up high­er and high­er…  because you believe that it will even­tu­al­ly work right?

What if they go too far… 

What if they just keep on rais­ing inter­est rates until the val­ue of the dol­lar drops too far and then no one will want to open a busi­ness or hire an employ­ee or buy a car or a house. 

What hap­pens then?

Noth­ing hap­pens because then peo­ple will not have jobs and they will not have cars and they will not have a home either…  Many peo­ple may not even have food to eat…

That is what will hap­pen if these peo­ple do not come to grips with the real­i­ty of this sit­u­a­tion and how they can­not stop infla­tion by mak­ing it more expen­sive for peo­ple to live because that is what is hap­pen­ing trans­fer­ence econ­o­my does not result in a pos­i­tive change…

That is what hap­pens when you just keep on mak­ing it more expen­sive … 

Inter­est rates just makes it more dif­fi­cult for any­one to do any­thing and if some­thing is not done that is sub­stan­tial­ly dif­fer­ent than what they have tried but failed to do then noth­ing will be the result and that means that Zero will be the final result. 

Zero new jobs. 

Zero new homes built. 

Zero Cars built because no one can afford to own one and no one can get a loan to buy one. 

Zero is what is hap­pen­ing every time they get up and dis­rupt the econ­o­my hop­ing that some­thing will hap­pen to change the noth­ing they are doing dif­fer­ent­ly.