Isn’t the Federal Reserve Supposed to Stop Inflation? US Money Reserve Helps

Wasn’t the Federal Reserve (Fed) founded to control inflation? Has it been successful in this endeavor? How can the US Money Reserve help with runaway inflation?


Federal Reserve Charter


Why did the United States cede control of its economy to the Federal Reserve on December 23, 1913? Americans had fought numerous wars to be free with control over their economic affairs. What did the Fed have to offer?


Before the Fed, there were numerous financial crises that severely damaged the American economy. The Fed was given two primary goals when it was established: 1. Control Inflation and 2. Handle Unemployment. The thought was that this would make both businesses and consumers happy.


The Fed sets a 2% target for annual inflation. These bankers believe that will provide the economy with plenty of room for growth without overheating. Businesses should be happy.


If there is too much inflation, then input costs rise too high and businesses cannot afford them. If there is too much deflation, then prices fall and businesses are not paid enough to stay afloat. The Fed was supposed to provide a happy medium.


Business Assistance


The Fed’s target goal for unemployment is between 4.7 and 5.8%. It calls this a “natural rate of unemployment.” There will always be people looking for better jobs. The Fed aims for an annual gross domestic product growth rate of between 2 and 3%.


What has the Fed been given in return? It has been given supervision of all America’s banks. The politicians, who created the Fed, believed that economic stability was worth, surrendering some of their power to the bankers.


Gold Rises with Inflation


Most Americans would be surprised to learn that their economy is controlled. It is a loose set of control, whereby the Fed controls the banks that issue the money. This is referred to as “Monetary Policy.”


By controlling access to money and interest rates, the Fed tries to keep the economy at its 2% inflation target. Has this worked? Will it continue to work?


At the beginning of 2018, there were international rumors that inflation might increase. Americans had been warned of the “Impact of a Fed Interest Rate Hike” in December 2017, so they could prepare. NBC News reported on what a “Fed Rate Hike 2018 Would Mean to American Finances.”


At the beginning of 2018, some consumers are experiencing rising inflation. Is this inflation above the 2% target level? Whatever happened to the Zero Interest Rate Policy (ZIRP)?


The US Money Reserve has been busy helping people handle rising inflation. You can buy US Money Reserve gold or silver coins as an inflation hedge.


The US Money Reserve has great articles about the economy. They are honest, blunt and timely. They prepare everyone for what might happen.


Buying gold can prepare you for rising inflation. When people read those reports from NBC, they might have gotten worried. The Fed doesn’t stop inflation, it tries to control it. Buying gold can help you hedge against rising inflation.


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