The Fed

Bernanke is evidently dedicated to one tactic: inflation now and forever.

Under its current leadership, the Federal Reserve is looking more and more like a Banana Republic central bank

The Federal Reserve System virtually controls the nation's monetary system, yet it is accountable to no one.

In the real world, an artificial boost in demand that is not supported by production leads to the dilution of the pool of real savings and, contrary to the Keynesian view, to a shrinking in the flow of real wealth. The result is economic impoverishment.

And what has Washington done? Rob us, badger us, and take us to war.

At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.

Taking the counterfeiters money is not wrong, but when the women started spending the money, as Lew Rockwell points out, that's "another matter, of course, as it imitates on a tiny scale what the Fed does, and dilutes the value of other people's money."

Last Tuesday, January 22, 2008, the US central bank lowered its federal funds rate target by a hefty 0.75% to 3.5%.

Let us say that the present aggressive interest rate stance by the Fed fails to prevent the economy from falling into a recession; what kind of action is Bernanke then going to undertake? In some of his writings, he has suggested that, under such circumstances, the Fed should adopt a very aggressive stance and start pushing money on a massive scale, i.e., helicopter money. Needless to say that if this were to happen, Bernanke would run the risk of badly damaging the foundations of the real economy.

For the present and the foreseeable future, there is probably nothing that will stop the Fed from continuing with its inflation.