Taylor the Teacher

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So why is Wall Street cheering? Is the investor class merely looking for another credit subsidy? The sad truth is yes, that is precisely what the financial markets want. This should not surprise us. A profligate and drunken son might be ruining his life, but the last thing he desires is to be denied access to his parents’ credit cards.

If the Federal Reserve were responsible and wise, it would say no to the demand for more money creation. And yet that would run contrary to its institutional reason for existence. It was founded by the federal government to create new money to fund World War I and immunize the banks from the risks associated with excess lending. The government loves this approach because it means not having to tax people. Taxing makes people angry. Money expansion destroys wealth in more sinister and coy ways. It reduces people’s purchasing power and sneakily robs them of their savings, even as it creates a false sense of rising prosperity.

from “The Fallacy of Money Mania” at LewRockwell.com