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The effect of the Federal Reserve increasing the money supply, and making it available to favored banks and the US Treasury at low rates helps cause inflation a
by Roboprog 13y ago
The effect of the Federal Reserve increasing the money supply, and making it available to favored banks and the US Treasury at low rates helps cause inflation and has about the same effect as a tax: your holdings are worth less, and somebody else, albeit indirectly, is able to tap into the value that those dollars held.
- rpicard 13y agoSounds like a pretty big stretch to call it a tax in my opinion.
- nthj 13y agoThe government has more money and I have less. I'd be interested to hear your suggestions for a better descriptor?
- rpicard 13y agoI'm not convinced that the government gets more money when inflation goes up. I've only taken an introductory level economics course, but I'm pretty sure the value of a currency goes down for everyone - government included - when inflation rises.