Stop Beating Up On Our Federal Reserve
by J John Swanko
11/30/10 (People Port) Our Federal Reserve (Fed) continues to get clobbered. Far too many of our leaders seek a replacement of our Fed. It is our Fed that allowed the building out of our nation. They did it by buying bank assets. Those assets allowed America to participate in the global economy for almost one hundred years. Looking back, We look far too innocent. We still do.
Even the Federal Reserve's largest detractors writing's appear innocent, the dual mandate is hard, We are the world's reserve currency. We need some inflation now, Fighting it is what our Federal Reserve and every other Central Bank does well.
In a BIS working paper,"The Federal Reserve, the Bank of England and the rise of the dollar as an international currency, 1914-39," by Barry Eichengreen and Marc Flandreau, Our Federal Reserve's earliest actions supported US Trade. That act encouraged our banks. It is obvious now, we were armatures in trade, we still are. The US dollar clobbered the Pound Sterling, right up until politics got involved in 1932. The two institutions, US firms had available to them for US Trade, were American Express, General Motors Acceptance Corporation (GMAC).
Most of the issues raised have been covered in past People Port articles. Those links, background, are gone, for now. Our financial wizards, today, would figure out something to keep trade working, should the Fed's, dollar's wings get clipped. The constant attempts to create a replacement (gold, commodities, or a basket of currency) will fail. The dollar's rise was a function of US business acumen. We love real competition. Our Federal Reserve's efforts to support America's industry, homeowners, international banking and the like. The governments that claim otherwise are speaking from experience.
Nations have used their international clout to support their industries for hundreds of years. The city state, Florance affected trade, to their benefit, for hundreds of years. Not US. Our Federal Reserve's actions may make manufacturing abroad unprofitable for American firms selling those products here in the US. Many of those firms are reopening factories here, because that is the correct business decision. It is part of upstream activity, transnational management, finance.
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Copyrighted, 2010, J John Swanko, All rights reserved. This work is licensed under a Creative Commons Attribution 3.0 Unported, It may not be published, broadcated, redistributed, rewritten, without meeting the terms and conditions.
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