Insanity

After yesterday’s announcement from the Federal Reserve, Ron Paul issued the statement below.  As usual, he’s right and, as usual, nobody seems to care.  Sooner or later, these guys are just going to have to suck it up and read Rothbard.

No one is surprised by the Fed’s action today to inject even more money into the economy through additional asset purchases. The Fed’s only solution for every problem is to print more money and provide more liquidity. Mr. Bernanke and Fed governors appear not to understand that our current economic malaise resulted directly because of the excessive credit the Fed already pumped into the system.

For all of its vaunted policy tools, the Fed now finds itself repeating the same basic action over and over in an attempt to prime the economy with more debt and credit. But this latest decision to provide more quantitative easing will only prolong our economic stagnation, corrupt market signals, and encourage even more misallocation and malinvestment of resources. Rather than stimulating a real recovery by focusing on a strong dollar and market interest rates, the Fed’s announcement today shows a disastrous detachment from reality on the part of our central bank. Any further quantitative easing from the Fed, in whatever form, will only make our next economic crash that much more serious.

Update (9/15/12):

Here’s some great analysis on the Fed’s announcement from Peter Schiff (the guy who predicted the last crash and wrote the highly recomended book, The Real Crash):

If you’re able to articulate a sound economic reason why the Fed’s policy won’t end in disaster, please let me know in the comments.  I would love to believe everything will turn out fine, I just don’t see how.

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One response to this post.

  1. […] that Ben Bernanke has embarked on QE-Infinity, the money machines really are going […]

    Reply

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