THE FEDERAL RESERVE AND WARS

Boy in the uniform of the Iberian Anarchist Federation, during the Spanish Civil War.

Is the problem the Federal Reserve, or, is the problem the Pentagon?

The central bank in the USA is called the Federal Reserve, which was created in 1913.

Before the founding of the Federal Reserve, the United States had suffered from several financial crises.

(Federal Reserve System - Wikipedia)

The Federal Reserve is supposed to manage the 'money supply' in the USA and reduce the chances of financial crises.

In 2008 it has lowered interest rates, at a time of high debt.

Lending money at low interest rates for the purpose of building sound businesses, and good and necessary housing and infrastructure, can be a good idea.

But lending money at low interest rates to corrupt, badly managed businesses, and for houses and infrastructure that no one wants, is not a good idea.

And printing money to pay for useless wars is very bad indeed.

Some people see wars as being the main problem.

From 1861 to the beginning of World War I (53 Years), the USA's debt increased from $2.8 to $3 billion.

But the USA's debt rose more than eight times, to $26 billion, in the first year of the USA's involvement in World War I.

During World War II, the USA's debt multiplied almost 4 times to $260 billion.

With the Korean War, the Vietnam War and other Cold War activities, the USA's debt rose, by 1988, to $2.7 trillion.

Thanks to the lengthy Iraq War and the Afghanistan War, the federal debt is now $10 trillion.

(http://inflationdata.com/inflation/Inflation_Articles/Inflation_War.asp)

According to some critics:

1. Interest rates should be allowed to rise when there is too much borrowing going on and too much debt.

And the Federal reserve should not be allowed to set low interest rates when there is too much borrowing and debt.

Low interest rates can lead to (A) too much borrowing and too much debt (B) inflation and a weakened currency (C) losses for savers and gains for certain debtors.

(My Recommended Federal Reserve Policy)

2. The Federal Reserve acts like a pyramid scheme.

It prints too many dollars.

The USA is in danger of becoming like Zimbabwe under Mugabe.

In the 1920s, the Federal Reserve printed lots of extra dollars and this has been blamed for creating a stock market bubble followed by the 1929 Wall St Crash.

In the 1930s, some people blamed the Federal Reserve for not printing enough dollars, thus prolonging the depression.

Dead Germans.

Wars make some people rich, but they also help to bankrupt nations.

The present world financial crisis has a lot to do with the Iraq War.

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