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Thursday, December 16, 2010

The new Fed mantra.

The mantra at the Fed has always been "there will be no more 1930s and there will be no more 1970s." I think after reading what is below the new mantra will be "there will be no more 1930s, there will be no more 1970s and there will be no Japan."


Anonymous said...

However, it seems as if a 1970's-like mindset is back en vogue with the central bank. We need a hierarchical mandate & forget the "full employment" portion of the Federal Reserve Act.

Jeffrey said...

The Austrian Economists at the Mises institute predicted Japans problems almost perfectly. This is no mystery to people who can accept that Keynes might be wrong - because he IS wrong.

Interest rates are the price system's way of allocating scarce resources across time. Keynes simply advocates price controls and socialized losses which leads to overconsumption, credit bubbles, inflation, and a parasitic government and banking industry.

An Austrian vs multiple Keynesians prior to the current mess: