Which is to be expected, no? I don’t believe the Fed is directly financing Obama’s spending or juicing the stock market. Their ZIRP policies indirectly do that, don’t they?
What should happen in a market with enormous credit errors?
1. Interest rates should rise.
2. Borrowers and lenders will unwind bad deals.
3. Bargains abound and savers/the prudent are rewarded.
4. New money is attracted and the market clears.
5. A return to normalcy.
Arguing the Feds’ side, you are really arguing for fiscal irresponsibility. The low interest rate environment is abetting the idiotic fiscal response. GW Bush was told by the Fed that they’d move to keep rates low. Then he approved the bail out.
Bad firms should go under, their owners should take the hit, and markets can and have cleared, American economic history proves that.
Your chart simply shows what would have happened under normalcy. The Fed’s wasted five years and remember that the Fed was there “managing” things during the previous bubbles. The US economy didn’t just start in 2008.
You post is thought provoking, thanks!
To communicate I need to understand the values that it’s based on; namely, are you in favor of Congress having the power to coin money and regulate it’s value. Don’t laugh —some on these threads want no gov’t whatsoever with a pure barter system. Thing is that if that really is your view then I’d be wasting my time explaining Fed strategy. If in case you like that part of the constitution, and you don’t like the way Congress coins’n’regulates money, then I still wouldn’t explain the fed but I’d be more clear if I explained Congress.
Please share your take on how we got money coins’n’regulated.