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An exchange between Tim Geithner and Rand Paul over the Fed's role in the Housing crisis. Did Geithner do a good job of dispelling some of Paul's views on the Fed's role in creating the housing bubble?
I've noticed that most Libertarians believe that the Fed causes most of the bubbles that end up bursting and hurting the economy. This is why they seem to be for getting rid of the Fed. Geithner sounded like he was trying correct some of the misconceptions that people like Paul hold as far as the Fed's role in our current crisis.
The FED has held interest rates artificially low for slightly over a decade. That is common knowledge to everyone it would seem except the OP.
Quote:
Originally Posted by Motion
I've noticed that most Libertarians believe that the Fed causes most of the bubbles that end up bursting and hurting the economy. This is why they seem to be for getting rid of the Fed. Geithner sounded like he was trying correct some of the misconceptions that people like Paul hold as far as the Fed's role in our current crisis.
Monetary policies based on fiat currency greatly contributes to bubbles. The FED controls this country's monetary policy.
^
According to Geithner the FED only affects short-term interest rates not longterm rates like Paul believes. So he pointed out to Paul that the FED dosen't have the control that he's assuming with interest rates. The rates were low because of the 01 and 02 recessions and the housing bubble was caused by both these low interest rates combined with deregulation on lending standards.
^ According to Geithner the FED only affects shorterm interest rates not longterm rates like Paul believes. So he pointed out to Paul that the FED dosen't have the control that he's assuming with interest rates. The rates were low because of the 01 and 02 recessions and the housing bubble was caused by both these low interest rates combined with deregulation on lending standards.
"The Twist" changed the bolded text to no longer hold true.
Thanks for putting things into proper perspective.
Don't quote me and change my words. That tells a lot about your character.
10-19-2011, 01:45 PM
2K5Gx2km
n/a posts
Geithner did nothing of the sort - the Fed has the power to set the intrest rate within any given period. What the hell is 'long term' interest rates anyway? That is a moot point since they can raise or lower it any time. He frankly just admitted what many have already said -- artificially (intentional distortions) low iterest rates by the FED and goverment policies (regulations) regarding risky loans were some of the main problems.
This is what happens when you think elite overlords and regulations can steer an econonmy in the right direction - it was only right for those who made millions and billions off the backs of most American citizens.
Why don't people realize that the issue is not really about regulation per-se but the type and scope of that regulation? Idiotos keep trying to define the argument about government / no government and regulations / no regulations. Both are flase dichotomies - but then again most people can think past their nose hairs.
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