How the Federal Reserve is Screwing Up the U.S. Economy Right Now

Do you want to know how the Federal Reserve is screwing up the United States economy right now? Read this article and you will find out.

The Federal Reserve is screwing up the United States economy right now by making bad policy decisions. The people running the Federal Reserve really have no idea what they are doing and they are clearly showing that with the policy decisions they are making today.

This is nothing new. Making bad policy decisions that clearly show they have no idea how an economy works and what the role of the Federal Reserve should be in the economy has been par for the course for the people running the Federal Reserve since the institution was created.

Here is a prime (probably the prime) example of the above statement. In the past, Federal Reserve officials have been quoted as saying, "The role of the Federal Reserve is to fight inflation".

That is one of the most absurd statements in the history of humankind. The Federal Reserve was not created to "fight inflation". Only the Federal Reserve can cause inflation in the United States economy, so the Federal Reserve was created to fight itself?

You see the absolute absurdity of the statement? Since only the Federal Reserve can cause inflation then why was the Federal Reserve created? To fight itself? (sorry to repeat but this is crucial)

The statement is beyond absurd and anytime you hear someone make that statement, or see the statement written on a website you know the person or the website has no idea how an economy works.

Inflation is not magically created out of thin air and it does not come marching into the economy like some conquering army. Only the Federal Reserve can cause inflation in the United States.

Inflation in the United States is always a product of Federal Reserve policies. If the Federal Reserve did not exist (and no other institution was created to replace it) the United States would never have inflation.

From 1860 to 1913 (the year the Federal Reserve was created) the value of $1 (one dollar) barely changed. One dollar in 1860 was worth $1.19 in 1913. Meaning virtually no inflation occurred in the United States before the Federal Reserve was created (other than in wartime).

From 1913 to 2018, the value of $1 has been inflated massively. One dollar in 1913 is now worth only $25.54. In other words, it would cost you $25.54 today to buy the same goods you could have bought in 1913 with just $1.00.

Those numbers tell the story. Prior to the creation of the Federal Reserve there was no inflation in the United States (excepting war times). Since the creation of the Federal Reserve the value of $1.00 has plummeted substantially due to inflation caused by the Federal Reserve.

Only the Federal Reserve can cause inflation in the United States.

So when you hear Federal Reserve officials today talk about fighting inflation you should realize they either have no idea what they are doing or they are trying to pull the wool over your eyes (hint - they have no idea).

When Federal Reserve officials keep talking about fighting inflation and you realize just how clueless they are you will start to realize how the Federal Reserve is screwing up the U.S. economy right now.

For more see:

Explaining Exactly Why the Great Depression Happened

Why You Must Do Calculations Before Making Financial Transactions

How to Get One Week's Worth of Groceries for Free