The Fed's Immoral Inflation Policy -Luddy/American Spectator
"The Fed's inflation policy is immoral and unethical, and it undermines the original intent to foster stable prices of the goods and services we purchase. Inflation undermines private property rights and steals money from the average person by reducing purchasing power every year. Prior to the creation of the Fed in 1913,
America experienced deflation: the cost of goods was low due to the Industrial Revolution and the gold standard. Deflation increases the purchasing power of the dollar and can occur from innovation and disruptive competition. Think of the impact Uber and Amazon have each had on lowering prices on multiple products and services...In 1960, a dollar would purchase four gallons of gas or four loaves of bread. You could attend many private colleges for less than $1,000 per year, and the interest rate for savers was 3 percent. In 2012, the Federal Open Market Committee issued this statement: 'The Committee judges that inflation at the rate of 2 percent... is most consistent over the longer run with the Federal Reserve's statutory mandate.' This statement is in clear contradiction to the Fed's mandate for stable prices...The Fed simultaneously reduces the value of the dollar and arbitrarily keeps short-term rates low. Both of these policies undermine economic growth and eliminate the ability of the middle class to save and prosper. When inflation exceeds interest rates, there is zero incentive to save....According to the Bureau of Labor Statistics, during the entire 19th century the value of the dollar increased. Deflation actually allowed the dollar to purchase more, which is a great outcome. Because of inflation, however, it now takes $25 to purchase what one dollar could buy when the Fed was created in 1913. The Fed must discontinue its interventions to control market interest rates and let the free market prevail."