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<p>[QUOTE=&quot;RabidRick, post: 1983686, member: 37868&quot;]Actually, when the Federal Reserve system was created JP Morgan was *hesitant* to take the position of chairman. He was taking a big paycut, for one thing. Their true purpose was to try and stop the bust and boom cycle which is an inevitable part of our economic system. Busts and booms happen in any free market, from the Duch Tulip Bubble in the 1600&#039;s and probably before that.</p><p><br /></p><p>The Fed&#039;s REAL purpose has always been to keep the public out of fear of a crash ever since 1907. They even held secret meetings on remote islands and told the public they were going on vacation so it wouldn&#039;t look suspicious when they knew stuff went down (hene all the bills about transparecy going back and forth).</p><p><br /></p><p>I&#039;m not going to join the demogogues and say our money will hyperinflate (I could see some double-digit stuff perhaps, i.e. from the 70&#039;s) especially since we EXPORT much of our inflation. The economy is such a stochastic system nobody can figure it out; I&#039;ve even heard Bernanke say this in so many words. They do what they can to try and help stabiize things but in the end nobody really knows what is going on.</p><p><br /></p><p>Also, FDR had&nbsp; lot to do with getting us out of the Great Dpression. One of the first things he did in office was repeal the prohibition act which created a milion jobs.</p><p><br /></p><p>The is all a MINDSET though. Fiat currency is a facade; peope have to trust it and when banks aren&#039;t reliable (there simply wasn&#039;t enough money) people freak out and withdraw. This is bad for the banks too since THEY invest your money, which I think is shady.</p><p><br /></p><p>In 2008 there was a self-perpetuatng downwrd spiral. Asset backed mortgage securities (based on an over-speculated housing market where the assets themselves were over-vaued) had a lot to do with it. The REAL prblem is all a mindset, though. A buch of &quot;money&quot; that existed speculatively just &quot;disappeared.&quot; People panic and people also get laid off because companies invest... If people get laid off they don&#039;t spend money. Companies lose money from this loss of revenue, and more people lose jobs. Now go back to step A) and repeat. Realize however nothing in terms of real assets has actualy changed. Markets go up and down but since investing is now nearly synonymous with the stock maret a huge crash would be devistating. Consumer confidence seems to be going up though, jobs are improving, etc. I don&#039;t see a crash happening in the near future; it will keep going up probably as a result of inflation. Any stochastic system like that I believe needs to hit an equilirium at some point. Adjuting for inflation it won&#039;t go up forever. Once people realize the lack of ROI though, who knows? That is, of course, if it hits equlibrium.</p><p><br /></p><p>I think the next big crisis will be all the student&nbsp; loans that are collecting interest and probably won&#039;t be paid off because everyone has a degree these days and most don&#039;t get they job (or pay) they anticipated. It isn&#039;t really a shoe-in to the job market anymore (but tuition prices have gone UP along with enrollment). Is that not a scam?</p><p><br /></p><p>Credit is somes needed to start a business or watever but it also causes these busts. The creditors are certainly making money though, i.e. off the average American who was told they need to pay tens of thousands of dollars (or way more) to not be fipping burgers.[/QUOTE]</p><p><br /></p>

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