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If we play the blame game one could also attack the Federal Reserve that pumped an unprecedented amount of money into the market during the Covid crisis, ran an
by G3rn0ti 4y ago
If we play the blame game one could also attack the Federal Reserve that pumped an unprecedented amount of money into the market during the Covid crisis, ran an almost zero interest rate policy even years before and now hurried to prevent further damage but created even more problems now.
Boom and busts are created by central bankers manipulating the money supply and not by the market players that act on their natural interests. Central banking is hubris pretending to know how much money an economy needs. It’s a dead end of an economy policy. It only serves governments running their deficit and those who run unsustainable businesses.
- machina_ex_deus 4y agoFor the last 20 years, the financial system learned how to throw these tantrums to reduce rates back down. Inflation numbers were also fudged. Financialization is successfully holding everyone hostage. Even before COVID in 2019 the Fed had given in to another tantrum. Today it is VCs tantrum. It's actually ridiculous. We've reached the point where the riskiest sector in the financial system gets to cry and get rewarded for bad behavior and self destruction. This isn't a problem of a strong Fed in control choosing what to do. It's a problem of a spineless Fed that gives in to manipulation. It isn't a problem of central banks manipulating, but being manipulated. Once the financial system realized it's in their own interests to be fragile, it was game over. They will keep on holding everyone hostage. Unless we figure out how to rescue the hostages without paying the kidnappers, this will continue happening.
- orwin 4y agoPrivate banks are created more money than the Fed did. Even during the pandemic, weirdly.