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The Fed’s Dangerous Trickle-Down Monetary Policy

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The Daily Bell interviewed Peter Schiff last week and published the first half of their conversation yesterday. Peter explained why the United States economy isn’t recovering and why he blames the Federal Reserve.

Peter also answered a slew of other questions. Does Janet Yellen know that the Fed’s monetary policies have been destructive, or is she just very ignorant? Will the Federal Reserve raise interest rates soon, or will a dollar crisis force its hand? Why do US stocks continue to rise when American economic data remains so weak? Will the presidential race actually affect the economy and the Fed’s policies? Could Rand Paul make a difference as president?


“I think that the Fed will try to keep the stock market from collapsing by printing more dollars, and so instead of a stock market collapse, we will end up with a dollar collapse instead. Now, when the Fed is ultimately forced to save the dollar with much higher interest rates, then the stock market will eventually come down for that reason. But in the short-run, the Fed is willing to sacrifice the dollar to bail out everything else. They don’t want the stock market going down, they don’t want the real estate market going down, they’ve created an asset-based bubble economy. The ‘recovery’ is based on inflated asset prices and the supposed wealth effect that follows.

“People want to talk about trickle-down economics. This is trickle-down monetary policy. According to the Fed, if they just make some people rich by boosting the stock market and the real estate market, then that paper wealth will trickle down to the real economy. This is what those guys actually believe.

“The irony of it is, you’ve got all these liberals at the Fed. Janet Yellen is very much a liberal, yet her policies are impoverishing the people that she supposedly cares so much about. The problem is Janet Yellen actually believes potentially that her monetary policy can help people. She actually thinks that the Fed can create jobs by creating inflation, that if she just prints enough money there’s going to be prosperity. It doesn’t work that way. All the Fed does is interfere with the prosperity that the markets would have created on their own.

“You hear Janet Yellen talking about ‘our goal.’ ‘Our goal is to make inflation higher,’ right? How does that benefit the middle class or the poor if the cost of living goes up, if food becomes more expensive, if the utility bill goes up, if the cost of clothing or educating your kids goes up or if it’s more expensive to go to the doctor? How is all this stuff getting more expensive helping anybody? Yet the Fed is pretending that inflation is a good thing.”

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