Anthony Gregory takes on the Federal Reserve in this terse but to-the-point article. In a few short paragraphs, he summarizes the arguments which debunk the myth that the Federal Reserve is something other than the engine of corporate fascism, the enemy of all free people.
Here's a quote:
"Then there is the idea that the Fed keeps the booms and busts in line. This is another total reversal of the truth. In a normal market setting, savings and inflation would be in harmony. The willingness of some to save and the demand of others for credit would work out to an equilibrium and produce the market interest rate. The Fed’s injection of new money into the system undoes this delicate balance. People get cheap credit and invest wildly in projects for the future, but those low rates no longer correspond to high savings. The consumers are still spending like crazy, the investors are investing like mad. This is what causes booms and eventually busts. When years later, people have not saved up enough to purchase all the products being produced through long-term investment projects, we have the bust. The Austrian Theory of the Business Cycle and sound economics help to explain the 1929 crash, 1970s stagflation after the guns and butter of the 1960s, the dot-com and real estate bubbles and all the other problems since 1913 that Keynesian economics doesn’t account for sufficiently. I suggest to everyone they read Murray Rothbard."
It's very elementary: time preference (the deferral of present consumption) itself has a market price, and this is called the interest rate. The more that investors demand money to invest (all things being equal), the higher the interest rate goes, which increases the supply of savings (deferred consumption), making real productivity available for investment. Likewise, as demand for present consumption increases (all things being equal), the interest rate rises, which decreases investment (by making it more expensive). As demand for investment decreases (all things being equal), the interest rate falls naturally spurring consumption as deferring present consumption becomes less rewarding (lower interest can be earned). Similarly, as demand for consumption decreases (all things being equal), the interest rate falls naturally, spurring investment.
Central bank counterfeiting is just a means to price fix interest rates down, which causes over-investment and under-saving. As with all price-control schemes, the necessary result is shortages and surpluses, but these are shortages and surpluses of the worst kind... shortage and surplus of capital itself. The effects on the economy are necessarily devastating. Voila Great Depression and Great Depression 2.0.