Hi Hal, All

Please, to all who want to dive in with "abolish the Fed." please start a new/separate thread.

KEEP IN MIND, THE POLITICIANS RUN THEIR OWN BOAT !!!

Maybe we should start with this:

Goal #1
maximum [sustainable] employment

Realistically, how do you accomplish this:
The primary tool the Fed. has/had was the setting of the "Target Interest Rate"
- This would effectively increase/decrease the "money supply" in the economy. They were/are "very good" at controlling that rate.
- Decrease the Target Rate, banks have more money to lend, businesses have more money to expand, employment improves (grows).
- As employment increases, there is more money to spend, more money chasing available goods, so the risk of Inflation rears it's head.
- So, what does one do ?? Increase the Target rate, decrease the money supply and bring things back into the "desired sustainable balance".

IT IS REALLY THAT SIMPLE !!

The "Target Interest Rate" is "Forced to the desired number" simply by the Fed. Trading Desk Buying Treasuries (to reduce the money supply) or Selling Treasuries (to increase the money supply.)

I DO NOT WANT TO APPEAR TO MAKE LIGHT OF THIS !!

The Why's, When's and How Much's play an important role and are not so easily determined.

I inserted the word "sustainable" between "maximum" and "employment" because if employment grows without bound so will cash available to spend, hence higher prices/inflation !!

Now, don't forget the Politicians get their fingers in there and screw things around as well !!!!
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Now, what is/was QEI and QEII ??
- Nothing more than all that was described above !!

I DON'T WANT TO GET INTO THE "CHICKEN OR THE EGG" HERE

The Banking system was coming "unglued" companies were laying off for lack of capital, un-employment was skyrocketing, the economy was headed toward "depression" not "just recession" and it took a substantial infusion of "cash" to turn things around, and they are "still not rosy".

I have no intention of claiming that all of the QEI funds were well placed into the economy either !!

How we got into this mess is a topic for another discussion.
I would maintain that the so-called "housing bubble" was just "excessive inflation" in the housing markets brought on by the "Politicians".

I hope I didn't drift too far from the Fed. Mandate.

Maximum sustainable employment, leads to maximum sustainable growth in the economy, leads to a "balancing act on inflation" and "interest rates" !!

I wouldn't want to be in their shoes !!

But the PRICE OF CRUDE IS NOT THEIR RESPONSIBILITY !!!

Thanks, Lee
PS
Where was Dx when Crude hit $147 ?? More than I can wade through in one sitting !!