Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Contact Us | All Access E-Edition | Home RSS

Stop the presses

November 22, 2010 - Rob Weaver
While reading about the indictment of two Tiffin residents and a Findlay resident last week on counterfeiting charges, I couldn’t help but think about the Federal Reserve Board. A quote from the article prompted the thought: “Counterfeit crimes are offensive to those hard-working people and detrimental to our financial system,” U.S. Attorney Booth Goodwin stated in a release. Think about that: Counterfeiting is “detrimental to our financial system.” Counterfeiting is a federal felony. The crime is investigated by the U.S. Secret Service, which was established to pursue counterfeiters, according to a report by National Geographic News. The agency was created after the Civil War, at time when more than a third — perhaps even half — of the U.S. money supply was suspected to be fake. There are two main reasons counterfeiting is big trouble worthy of investigation by an agency eventually entrusted with protecting the president. For one, it undermines faith in the currency. Also, it is unhealthy for the economy. That’s because phony money can reduce the value of real greenbacks, while the extra dollars in the economy can increase prices by causing inflation. Plus, that National Geographic News report said a major concern of the U.S. Secret Service is that some financially corrupt governments may produce U.S. currency notes to prop up their economy. But to me, that sounds dangerously close to what the Federal Reserve plans to do with the so-called “quantitative easing.” The central bank announced this month it plans to buy $600 billion in long-term Treasuries over the next eight months. Meanwhile, the Fed announced, it will reinvest another $250 billion to $300 billion in Treasuries using proceeds of earlier investments. The hope is that by pumping more money into the economy, the funds will change hands more often and accelerate economic growth. Consider it the Venturi effect on the economy. The problem is it will devalue existing currency; that seems inescapable. What then can happen is, as the dollar falls in value, more of them will be required for any given transaction. Thus, we’d have the same number of people working, producing the same amount of goods and services, but the prices of those goods and services would increase. It’s tough to counsel patience at a time when nearly one in 10 people who wants to work can’t find a job, and nearly as many want -- and often need -- a better job. But I believe the current economic growth, while sluggish, is sustainable. I fear more federal intervention in the economy will product another financial bubble -- one which, if it were to pop, would blow up under everyone, not just those in the housing and mortgage industries and people conned into home loans they couldn’t afford.


Article Comments

No comments posted for this article.

Post a Comment

You must first login before you can comment.

*Your email address:
Remember my email address.


I am looking for:
News, Blogs & Events Web

Blog Photos