jpete wrote:At best it is a symbiotic relationship.
Once Congress anoints the Fed chief, they are locked out meetings and as we have seen recently, getting them to open their books is a monumental task.
The Treasury sells bonds and uses them to get a loan from the Fed. Nothing say the Fed HAS to make the loan. It's just in their best interest to keep the politicians happy and the money rolling in.
Jackson broke the Second Bank of the United States. Congress could easily do the same thing. But they won't because shaking up the monetary system is probably suicidal.
Yes, it is a symbiotic relationship. That's bascially what I am saying. Both parties have goals and the path to their achievement is beneficial to both. One won't sell out the other. One cannot sellout the other without hurting itself.
The problem is that the government, as you stated earlier, has the propensity to do more damage to the people through their deficit spending/fiscal policy and subsequent debt monetization. The net effect is the same as a monetary policy that devalues the dollar. The people's money gets destroyed in the long run. Under easy money, investment is stimulated, consumer goods are cheaper but static wealth is hard to hold on to over time. Thus, the power of the government and corporations cannot be challenged by static wealth (old unproductive money). It's a tyranny of the government and the corporation that checks the tyranny of the elite and the private wealthy.
The common people lose their simple entrepreneurial opportunities. They don't often have the education or resources to combat the inflation effects caused in this monetary war.