An Epiphany at the Fed
There are nascent signs of a profound shift in ideology by global central bankers regarding the application of monetary policy. Traders and investors alike should be watchful, as this could have a substantial impact on all asset classes in the near future. Yet neither the markets nor the financial media have recognized this phenomenon.
When modern central banking was established with the creation of the U.S. Federal Reserve in 1913, it was partly a reaction to a series of business boom and bust cycles following the Civil War and the emergence of the Industrial Revolution, culminating with the banking crisis of 1907. The political rationale for creating the Federal Reserve was to provide countercyclical intervention to thwart economic activity that resulted in either inflation or deflation, thus mitigating the business cycle. As logical as it sounds, the idea of intervention has been contested by large segments of academia dedicated to the study of economics and political economy....343 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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