A question for everybody out there who is pissed off about the economy being in the doldrums. What caused the whole, "recession" thing? Certainly our government had nothing to do with this. Right? Wrong. Government manipulation of the economy has become standard procedure in recent times. Consider the high profile government buyouts of Bear Stearns, Fannie Mae and Freddie Mac. The government has clearly established themselves as the protectors of the American economy when "capitalism" fails. Too bad the Fed (technically not a government agency?) got us into the damn problem to begin with. Holy Shit! I feel like I'm taking stupid pills here! Doesn't anybody realize? Let me illucidate.
1. The government inflates the money supply through the Federal reserve (aka low interest rates / easy credit).
2. Good times, brought about by rapid inflation, begin to effect the value of the US $ on the world market.
3. The Fed raises interest rates to protect the value of our $'s and HOLY SHIT! WE ARE IN A CREDIT CRISIS! OMG!!!!
This news story states this about the credit crunch, "This time, it's squeezing not only Wall Street but Main Street. Will it trigger a recession?" (usnews.com). Hmmm... somebody doesn't know shit about economics or politics. To escape the "recession" early, inflation must begin again (aka lower interest rates). When this happens the economy will mysteriously start looking healthy again. You may ask why the Fed doesn't do this sooner? Well, there is the whole problem of the strength of the US $, which is doing quite well by the way (dailytimes.com.pk) and the fact that maybe they want to wait untill the next president gets into office. It sure will look nice when either Obama or McCain assume office and "fix" the economy.
I love my country, too bad I can't say the same for my government.
P.S. I don't know what the hell i'm talking about so feel free to correct me in comments.
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