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There are two things that make the dollar especially valuable for investors. One is the fact that the federal government has NEVER EVER defaulted on its debt obligations. So the federal government's bonds are considered to be perhaps THE safest place to put your money. So the dollar has essentially become the "mattress" for the world's investors.
The other important factor is that the America's inflation rate has remained at a low and very predictable rate (except during the 1970's), something that is very important if you're going to invest in something based in dollars. I think most people today take it for granted that the American inflation rate will never be much more than 3%-yr. This doesn't happen by magic.
The Fed's main purpose is to ensure that this "magic" continues to happen by contracting the money supply when an overheating economy stirs up inflationary presssures - but it also plays a role during downturns by loosening the money supply (when inflationary pressure is usually weak) to help get the economy back on track.
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Originally posted by MelanerpesEr...um....the Fed just recently started to monitize the debt. Of course, that is after they promised they would not.
There are two things that make the dollar especially valuable for investors. One is the fact that the federal government has NEVER EVER defaulted on its debt obligations. So the federal government's bonds are considered to be perhaps THE safest place to put your money. So the dollar has essentially become the "mattress" for the world's investors.
The y (when inflationary pressure is usually weak) to help get the economy back on track.
Originally posted by no1marauderWho's currency is the Fed printing? Who's debt are they buying?
LMAO! The Federal Reserve is buying its own debt?
I suppose that is why the Fed was never created as an official government entity. That way they can blame the private sector even though it is controlled by the state.
Originally posted by PalynkaThe dollar being the world reserve currency does not owe the fed reserve for that position. The Swiss franc has had a low inflation rate and has been quite stable for many years.
How am I altering the subject? I answered your question about prosperity and I gave a clear cut example on how something that massively benefits the US would not have been possible without the Fed. Yeah. Shame on me for doing so.
Oh, and the Fed doesn't have the interests of Canada and the world as their number 1 priority? Shocking stuff.
By the way, ...[text shortened]... he dollar being the international reserve currency. "The Fed helps"? You should do stand-up.
The US government is more deserving of creating the right conditions for the dollar being the world reserve currency.
http://www.lewrockwell.com/paul/paul303.html
Originally posted by whodeyThe Fed isn't "controlled by the State" you ignoramus.
Who's currency is the Fed printing? Who's debt are they buying?
I suppose that is why the Fed was never created as an official government entity. That way they can blame the private sector even though it is controlled by the state.
Originally posted by Metal BrainLew Rockwell?
The dollar being the world reserve currency does not owe the fed reserve for that position. The Swiss franc has had a low inflation rate and has been quite stable for many years.
The US government is more deserving of creating the right conditions for the dollar being the world reserve currency.
http://www.lewrockwell.com/paul/paul303.html
Originally posted by no1marauderSo let me get this straight. The Federal government created Fed, the President appoints members to it, they are subject to the authority of Congress and has Congressional oversight, and any surpluss goes into the US Treasury and you expect me to buy your pathetic argument?
The Fed isn't "controlled by the State" you ignoramus.
It's like a mobster opening a legitimate business as a cover for his other unscrupulus endevours.
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Originally posted by whodeyEverybody is subject to the authority of Congress, so I guess we are all controlled by the State according to your idiotic assertion.
So let me get this straight. The Federal government created Fed, the President appoints members to it, they are subject to the authority of Congress and has Congressional oversight, and any surpluss goes into the US Treasury and you expect me to buy your pathetic argument?
It's like a mobster opening a legitimate business as a cover for his other unscrupulus endevours.
The Executive has no power over the Fed at all except to nominate members for lengthy terms of office. In reality, the Fed is free to do whatever it desires within the confines of the law.
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Originally posted by no1marauderYep, I'm just like the Fed. In fact, the President appointed me a poster on this forum and I continually give speeches to Congress about the state of the economy as they just smile and nod as I give them dire warning after dire warming about their spend thrift ways. Then at the end of the day they take pretty much any excess salary out of my bank account and it goes straight to the Treasury via taxes. Then to piss them all off I just start printing money in my basement to devalue the dollar just to get even with them all.
Everybody is subject to the authority of Congress, so I guess we are all controlled by the State according to your idiotic assertion.
The Executive has no power over the Fed at all except to nominate members for lengthy terms of office. In reality, the Fed is free to do whatever it desires within the confines of the law.
God help me, I am just like Ben Bernanke!!! 😲
Originally posted by Metal BrainOkay -- there's a third reason why the dollar is the world reserve currency. The United States is an extremely large economy (much larger than Switzerland). So there's a lot more US currency in circulation than Swiss currency.
The dollar being the world reserve currency does not owe the fed reserve for that position. The Swiss franc has had a low inflation rate and has been quite stable for many years.
The US government is more deserving of creating the right conditions for the dollar being the world reserve currency.
http://www.lewrockwell.com/paul/paul303.html
Of course, the larger size and diversity of the American economy also makes it a much bigger challenge to keep everything stable enough to make it attractive to investors.
Originally posted by whodeyYou're not merely playing the idiot; you really are one.
Yep, I'm just like the Fed. In fact, the President appointed me a poster on this forum and I continually give speeches to Congress about the state of the economy as they just smile and nod as I give them dire warning after dire warming about their spend thrift ways. Then at the end of the day they take pretty much any excess salary out of my bank account an ...[text shortened]... the dollar just to get even with them all.
God help me, I am just like Ben Bernanke!!! 😲
Simply admitting you haven't a clue about the structure of the Fed would be a more honest move and thus one you will never do.