Forum Post: why we do what we do

The Fed should have the nation’s best interest at heart. This means that in times of stagflaition, low interest money barrowing, high unemployment times, and high debt to gdp ratios, it becomes imperative that the fed flood the market with currency. If it chose to raise interest rates, by taking dollars out of the system, at this juncture, that would balloon the already high debt to GDP ratio. Think about it like this: right now as things stand, those that hold substantial debt, the 99%, will find that once the dept is paid off at the end of the loan, the inflation will eat the profits of the loan originator. If the inflation grows quicker than compound interest accumulates, the bank looses money. This should create incentives for bankers to invest in America. If they don’t, then they shoot them selves in the foot. The fed can’t allow the interest rate to rise because it would bring the day that we would have to raise the debt limit. And we all seen how that went last time it was done. But while it is putting more dollars in the system, it is deleveraging the banks profits. From this perspective, I think the fed is doing a great job. No? There are a lot of people loosing wealth because of the fed’s actions, but call it bitter medicine, not treason