Home > conservative politics, Politcal economics > ST. LOUIS SCHOOL URGES STRONG DOLLAR POLICY TO BEGIN THE REAL CORRECTION OF THE ECONOMY

ST. LOUIS SCHOOL URGES STRONG DOLLAR POLICY TO BEGIN THE REAL CORRECTION OF THE ECONOMY

Time Magazine named Ben Bernanke man of the year for his 2009 management of the financial meltdown.  Bernanke , along with Hank Paulson, Congress, and George Bush, engineered a massive bank bailout and “added liquidity” to the system.  Barrack Obama signed another TARP bill in 2009, only this time he and his czar’s imposed compensation and capitalization restrictions on those institutions. 

 The awards committee may think Bernanke saved the economy, see things differently.   However, the fact is that through business loans, the actually money supply increased from 55-60% between July 1921 and July 1929.  The amount of currency in circulation stayed constant throughout the decade.  This lead to the stock market boom and the eventual bust. 

Many claim that The Crash of 1929 was the primary cause of the Depression, but tis is not the case.  Stock market prices merely reflect the value of a company’s capital, and the demnad for the shares does not necessarrily indicate the firms productivity. 

.Many say that The Great Stock Market Crash of 1929 caused the Depression, but this is not so.  Stock prices only reflect the value of a companies capital, and it is not necessarily an indication of the firms  productivity. 

Amatecon.com points out that stock prices for a company “ merely reflects current information about the future income stream of that company.  Thus, it is a change in available information that changes the stock price.  When the Fed began to raise interest rates in early 1929, this began the tumble.”

So those who point to the 2009 stock market recovery as a case for the Fed’s weak dollar approach forget that the values are just movements amongst an already monetarily distorted set of values.  The artificial low interest rates that the Fed has maintained through the decade precipated these stock and real estate cycles, and Bernake is just maintaining the same approach.

Also, this weak dollar, not greedy oil CEO’s, was the cause of the devasting spike in 2009 gas prices.  Consumers and busnesses having to pay +$4.00 a gallon damaged the employment mearket, not the Bush era tax cuts.

Only this time he is doing it in conjunction with an 800 billion dollar TARP fund and a regulation obsessed administration.  So all Bernanke is really doing is forestalling the necessary market correction that needs to occur.  This adjustment would be brought about through  raising interest rates to a realistic level and returning the value to the money people have saved. 

 But that might mean that unemployment might rise at an even faster rate in the short term, and that would make an already failing presidency look even worse.

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