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Originally Posted by willravel
If we stopped printing money that wasn't backed, we'd actually slow inflation. What they're dong is putting a bandaid on an arterial hemorage. Can someone please tell me why the Fed answers to no one?
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The Full Employment and Balanced Growth Act of 1978, known as the Humphrey-Hawkins Act, required the Fed to set one-year target ranges for money supply growth twice a year and to report the targets to Congress. During the heyday of the monetary aggregates, in the early 1980s, analysts paid a great deal of attention to the Fed's weekly money supply reports, and especially to the reports on M1. If, for example, the Fed released a higher-than-expected M1 figure, the markets surmised that the Fed would soon try to curb money supply growth to bring it back to its target, possibly increasing short-term interest rates in the process.
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http://www.newyorkfed.org/aboutthefe...int/fed49.html
Actual printed money is a small percentage of our actual "money supply". They print money because we need it. Old money needs to be replaced and we have to fund liquidity.
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