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: > The Federal Reserve's duties fall into four general areas: .........(1)
: > ........stable prices; (2)
:
: Surprise moves like today tend to destablize, and almost seem
: to be an intent by the Fed to use the positions of professioal
: market participants to its advantage. Try making the case to
: specialists and hedge funds, all of whom provide key market
: liquidity, the case that sudden action intent on surprise is an
: act of stablization.
You've taken the words out of context to skew the arguements in your favour.
If you read the Fed's charter/purpose at
http://www.federalreserve.gov/pf/pdf/frspf1.pdf , you would realize that the
stable prices refer to the prices of bread and butter, i.e.,
inflation/deflation. Not the prices of individual stocks, bonds or mutual
funds.
: > .................(3) maintaining the stability of the financial
: > system
...and containing systemic risk that may arise in the financial markets.
: Both sides of market postions by professionals--short and long--
: deserve consideration by the Fed. And in no instance should
: the Fed ever use the position of any key market players to
: to its own disruptive advantage.
I don't think the Fed is out to micromanage market positions when they are
suppose to manage the whole economy, not just a component of it. Their job
is to prevent a bank failure like the Continetal Illinois, LTCM, etc.
: > ....... and (4) providing certain financial services to the U.S.
: > government, the public, financial institutions, and foreign official
: > institutions, including playing a major role in operating the nation's
: > payment systems.
:
: All this suggests that the Fed is a public servant, and therefore
: responsible to the private sector which lends it's authority to
: government and not vice versa.
Which private sector? The financial speculators/market participants or Joe
Six Pack and his crew of working stiffs? Where did you get the idea that the
only entity the Fed is responsible to is the financial markets?
Their job is manage the economy. Not to act on the whims of a market
participant.
: I believe the Constitution
: aptly begins "We the people...". And if the concurrent language
: of the Fed Reserve does not in fact reflect this, I would humbly
: submit that it is long overdue. An added section to such charter
: might begin "First, do no harm..."
Bitch to your local congressman/woman. Then join the American Medical
Associations.
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