Title: Fed Up (An insider’s take on why the Federal Reserve is bad for America)

Author: Danielle Dimartino Booth

Hi there,

my book for this week will be a much shorter review than generally have provided in the past. The main reason is that the book is simply a recollection of someone’s time working within the Fed, and telling their story of what happened inside the Fed before, during and after the last decades bubbles.

The Fed chairs that the author has seen at work were Alan Greenspan, Ben Bernanke and then Janet Yellen. All of them PhDs in Economics, and no one with any experience in business (ie. theorists, and no practice).

The dual mandate of the Federal reserve was to retain price stability and maximizing employment. The tools it has at its disposal (ie. monetary policy) are the power to raise or lower interest rates (lending rate to the banks) as well as the quantity of money in circulation.

• In the author’s view, the power that the Federal Reserve holds gives them much more power than the Congress itself, because their decisions on those two elements directly make an impact to the economy.

In her story she writes about how she started off writing and clarifying the jargon statements of the high economists, so that the general public could also obtain an understanding of what exactly they were saying. She was then later appointed by someone to the Federal Reserve itself, where she continued providing her reports to her heads Rosenblum and Fisher, and they continued their fight to oppose the policies that Bernanke was trying (and successfully) got voted effective. Mainly what they were doing was wanting to stabilize the economy and have it grow, by lowering interest rates and then later introducing more money, via QE (quantitative easing). However, Fisher held that the Fed shouldn’t interfere with the economy when it is in distress as much as it does, since its interference could have significantly more devastating effects in the future. However, they maintained to vote against Fisher, and continued to drop interest rates (to encourage borrowing) and introduce more money to the system (which only causes inflation, dropping the purchasing power of everyone’s current holdings).

Quite frankly, the extent to which central banks influence the economy has grown since its inception, and we have seen some economic shocks lately. Most people that invest in Gold/Silver do so because it is the only asset that the government cannot print, and maintains its purchasing power for years to come. I even believe that in the American Declaration of Independence they might have mentioned something that they are against the country of having a central bank, due to their experience of having a central bank in their own home countries from where they had emigrated previously.

• That’s why investors advise you not to save the fiat currency that the government issues, because they can print more of it, and therefore reduce your current savings’ purchasing power (the hidden tax)
• They rather advise you to take that money and buy gold/silver, real estate, stocks, bonds, other assets, because there your money has an opportunity to grow in value and hopefully maintain the purchasing power

I think it’s become more important that everyone become educated on how the system in a country works so that we don’t become blind subjects to a system that can take value from us, and we don’t see it coming, so we can be prepared and save our purchasing power from the debasement that is happening.

Summary:

The book gives the clear message that the Fed has become more involved in the economy than healthy for the economy, and that if this stays that way some of us (poor and middle class) who don’t understand it as well, need to become smarter and fight back, by investing better. The book gets a rating of 3/5