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To: Mase

I would prefer that the Fed’s GOAL is stable prices. If your goal is slight inflation you will end up with more inflation than you want.


19 posted on 01/10/2011 8:13:51 AM PST by DManA
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To: DManA

The Fed’s goal is stable prices. They choose to err on the side of slight inflation because deflation is much more harmful. Managing the supply of money to meet demand, and not create inflation or deflation in the process, ain’t easy. They’ve done a pretty good job of it over the past 50 years or so. Stable prices were pretty hard to come by when we were on the gold standard. We’d experience a year of massive deflation followed by a year of massive inflation. These wild swings wiped out a lot of businesses, especially farmers.


22 posted on 01/10/2011 8:25:44 AM PST by Mase (Save me from the people who would save me from myself!)
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