Inflation, booms and busts, politics, and the Federal Reserve, part 2
In a prior post we pointed to the Federal Reserve System (the Fed) as the engine of inflation and the source of repeated booms and busts. See "Inflation, booms and busts, their pathology and their cure," at In this post, inspired by responses of readers of the prior post, we augment our comments about the Fed and the U.S. banking industry as follows. One perceptive reader remarked that it is highly unlikely the Fed will be abolished before the currency has lost all value. He asked whether there is any historical precedent for those in control of state finances and banking taking action to prevent a permanent collapse of a fiat currency. History seems to indicate that eventually all fiat currencies will lose all their value given enough time for the debasement process to continue. However, there are some instances of nations whose financial authorities stepped back from the