In response to:

Prophets and Losses

Specious Rule Wrote: Feb 05, 2013 9:17 AM
Outside of the big picture questions that professor Sowell has pointed out regarding the federal reserve there are several questions that can be asked about our Feds current state. The fed now holds nearly one trillion in mortgage backed securities. Are these securities safe and what would happen to the fed and other banks if there was another crisis due to a collapse in this market? The fed has held interest rates at rock bottom lows and at the same time has been gobbling up assets. They now hold 3 trillion in assets. When interest rates do rise these assets will loose a lot of value. How will this affect the economy and the Feds ability to conduct monetary policy without printing/borrowing?
Now that the federal government is playing an ever larger role in the economy, a look at Washington's track record seems to be long overdue.

The recent release of the Federal Reserve Board's transcripts of its deliberations back in 2007 shows that their economic prophecies were way off. How much faith should we put in their prophecies today -- or the policies based on those prophecies?

Even after the housing market began its collapse in 2006, Federal Reserve Chairman Ben Bernanke said in 2007, "The impact on the broader economy and financial markets of the problems in the subprime market seems likely to...