The Federal Reserve lowered interest rates to near zero last week. That in itself may have been enough to restore confidence in our economy. But Ben Bernanke took the boldest step ever. He topped this off by buying Treasury securities and creating money like a drunken sailor. He says this needs to be done. Whether or not he's right remains to be seen.
Much of what happens in the foreign currency markets is a matter of perception. Traders for central banks around the world make their decisions to buy or sell a currency based on the actions of the government that the currency represents. For this reason many world governments viewed Ben Bernanke's actions to create such piles of money as a walk on the wild side and decided to sell dollars. How far the Federal Reserve goes in printing money is anyone's guess. We have to keep in mind that, except for a few periodic reports to Congress, there are virtually no checks and balances on the Fed. They were intended to operate as a separate entity apart from any branch of government. Meanwhile, the fate of our economy and to some extent the world economy is in the hands of Ben Bernanke and his merry men.
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Reader Comments (Page 1 of 1)
12-21-2008 @ 11:48AM
Cpt-D said...
DUH, the FED is an illeagal PRIVATE bank that controls the US Currency- Not the congress like the US Constitution says should!