The New York Times Shows the Establishment Defense of the Federal Reserve System: A World Without the Fed Is Considered Beyond the Pale

Roger Lowenstein writes a long column in the New York Times. Lowenstein reminds us that the Fed wasn't always around. We are also told many establishment fairy tales:

The gold standard — which John Maynard Keynes termed a “barbarous relic” — led to ruinous deflations. When gold reserves contracted, so did the money supply. David Moss, a Harvard Business School professor, asserts that the United States experienced more banking panics in the years without a central bank than any other industrial nation, often when people feared for the quality of paper; specifically, it experienced them in 1837, 1839, 1857, 1873 and 1907.

The Fed was conceived to alleviate such crises; that is, to be “the lender of last resort.” This function was fulfilled, ad hoc, by the financier J. P. Morgan in the panic of 1907.

Since America experienced its' greatest economic growth from 1836 to 1914, with a stable dollar: we suggest Lowenstein look at the facts. Deflation is good. Deflation represents a falling price level. I like my Ipod's to get cheaper. If the Fed is such a great institution : why has the dollar lost 95% of its' value since 1913? Or failed to prevent banking panics like in 2008 where the federal government ends up owning shares in major banks? Check out the video down below where Ben Bernanke shows just how wrong one person can be over several years!