Is inflation, recession and other economic factors artificially induced?

Question

Is the Federal Reserve artificially inducing our economy for their own purposes? Is that why the Federal Reserve was created in the first place?

Answer 1

youre not supposed to think that hard. who are you? what is your purpose? ;)

Answer 2

No, the Federal Reserve does not artificially induce inflation and recession. If you recall, the Federal Reserve was created in 1913 by the Federal Reserve Act of 1913. The United States economy had inflation and recessions long before that period. Just look at the Panic of 1837, which was probably the worst recession in its history to that point, and was only rivaled by the Great Depression.

The Federal Reserve was created for the purpose of smoothing out the money supply and regulating the banking industry. Before the Federal Reserve was created, money was issued by individual banks. This was fine in small communities, but if individuals wanted to travel to purchase goods, it could be a hassle, as the bank that issued their money may not have been recognized by the banks in the part of the country that they were traveling to. There were many banks that abused their banking responsibilities, printing up money that was unbacked by deposits, sometimes printing 100x as much as they had in deposits and then going out of business, leaving the depositors without their money. This was all rather confusing, and thus a central bank was created under the Federal Reserve Act.

The Federal Reserve has done a fairly decent job as of late in controlling inflation and keeping the economy from experiencing too many recessions. Boom periods have generally been longer than in the past, and recessions have generally been shorter, which is a good thing. The Federal Reserve (especially under Alan Greenspan) is able to take credit for a lot of this.

Hope this helps.

Answer 3

I am not sure what you mean by artificial. The whole economic system is man made(artificial). Business cycles were endemic in all capitalist economies long before the Fed was created. The Fed was created to regularize the issuing of currency. Prior to the feds creation individual banks freelanced in issuing bank notes, because there was not enough coinage from the mint to support the economy. The Fed started to use monetary policy in an attempt to smooth out the fluctuations in the business cycle after the depressions of the 1930's. Inflation is a result of issuing too much money, and economic slow downs the result of too little. If we did not have the fed, banks or some other institution would fill the gap by creation something that people could use as money.

Answer 4

Not sure about inflation, although I have suspicion that it cannot be controlled. But, all other economic factors are definately controllable by the Fereral Reserve and the World Banks.

The United States no longer prints money that is based on gold or silver standards (Fereral Reserve Notes now), our dollars are printed just to create more dollars. If you combine that thought with the fact that our national debt (money we owe in gold based dollars) is 9 trillion and growing and, we only pay interest on that debt. That game has been going on for about fifty years now.

I beleive that the economic wizards that work in our government know that we would go broke and take a bunch of other countries with us if; we tried to do anything that would smack of the US paying off it debts. So, we are playing the economic world game and we are good at it! We have huge trade deficits with other countries but we still buy from them while they buy little from us...Think about it? Why would we continue to export oil product when we have the largest oil fields in the world under the N. Shore in Alaska... Think about it? When other countries want to change their monetary systems (except the Euro), the subject usually gets dropped in a hurry...

Fake dollar or real dollar, we owe other countries so much money that it doesn't matter what form it takes, it just has to look like a dollar. I don't remember why the Federal Reserve was created but I know they must be really smart to keep our lame butts from going upside down... Finanacially.