Former IMF Economist Says Fed Isn't Superman

Market Watch reports:

The former chief economist of the International Monetary Fund, Raghuram Rajan, tells MarketWatch’s Greg Robb the Federal Reserve can’t be expected to be a Superman in times of economic trouble.

Of course, if the Fed can’t be superman, this begs the question of why do we even have a Federal Reserve?

When the Federal Reserve was founded, it was specifically designed to prevent depressions and wild swings in the currency.  The banking system prior to the Federal Reserve wasn’t perfect, but it did NOT have massive depressions and prolonged periods of unemployment.  Prior to the Fed, people were forced to pay attention to what their bank was doing.  If their bank screwed up, the investors in the bank (the depositors) could lose their money.  Of course, we EXPECT investors to lose their money if they do not invest wisely, but the US government felt this was unacceptable.  Hence, the ultimate criminal ponzi was born to socialize investment losses to the lower and middle classes.  The Fed specifically was created to be a lender of last resort to insolvent banks that had made bad investment decisions (like the mortgage crisis we have now for instance).

Since the creation of the Fed, we have had 3 major depressions, wild business cycles leading to huge unemployment, and we have sustained a 95% loss in the purchasing power of the dollar.  Currently more than one in ten people is unemployed and more than one in five is under-employed.  Prior to ending the gold standard, the dollar had maintained its purchasing power for over half a century.

Rajan says, “[The Federal Reserve] should lay out a path of exit, out of these ultra low interest rates.” and that ”congress may need to get involved with new innovative schemes”

I don’t know about you, but the last person I want running the economy is Barney Frank or Nancy Pelosi.  If highly trained economists can’t run a command economy, we can be sure the mental midgets in congress will not be any better.  The correct solution is to let private industry run the economy and set rates of lending based on the available savings of the public.  The correct solution is to eliminate the criminal Federal Reserve and return to a gold standard.

Austrian economist Robert P. Murphy explains why the Fed can’t raise interest rates and why this ultimately means we are all doomed to a hyper-inflationary debt cycle leading to the total destruction of the debt note you call the dollar.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Davidd

    not related to this post,
    I was hoping this morning to find something about yesterdays glenn beck rally.
    Have you watched it (i watched it on youtube) and what did you think about it.

    I hope you write a summary soon.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Michael Suede

    Glenn Beck doesn’t really jive with my style.

    I think he’s OK, but he’s just too much of a statist that doesn’t have a serious enough grip on Austrian economics for me to really care what he says.

    I think he does a lot of good work though. More good than bad if I had to average it, which is extremely rare for a mainstream opinion host.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Davidd

    austrian economist? maybe you will like this guy

    He claims to be an austrian economist too. *in this vid he is reporting about beck*

    Though I disagree with Beck on many issues, I do appreciate his fight against fascism.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.

  • Michael Suede

    Yeah I routinely post Reason’s videos.

    Gillespie is much closer to where I am.