From what many people have been saying, and what appears to be true, the incredibly low interest rates of the Fed are causing huge damage to the middle class because of inflation.

Inflation should be incredibly harmful for the middle class because the middle class needs to save up money to advance upward on the economic ladder. Money needs to be saved to buy a new home, upgrade something in a company or buy a better house, and inflation will make those savings goals harder.


However, whenever people bring up the problems with a low interest rate and high inflation I only hear an informal analysis of the problems with a low interest rate, instead of any real numbers. I was wondering if maybe the increased ease that people could borrow money with a lower interest rate would actualy spur bussines enough to reduce alot of the damages to the middle class, or even be good for them despite the inflation.

I do not have much specific economic knowedge about the fed's interest rate, so if anyone can wiegh the option of a low or high interest rate, I would be curious what those people think.

Inflation may be very bad, but I have no way of actualy knowing through the use of statistics if the economic growth from a low interest rate will counteract the inflation.

Right now I think that the fed should be disbanded and replaced with the gold standard, but if anyone has a way to defend the fed's actions I would like to hear it.

Well, Its a 2 fold situation.

Lower interest rates causes a devulation of the dollar lowering the purchasing power of the dollar. This is what causes inflation. So lowering interest rates to spur growth is a failed idea as it will raise prices. Kinda like what happen in the late 70s.

Our current Fed interest rate is at 2%.. and the dollar is trading at 1.6 Euro for 1 dollar. Which means the Euro is stronger.

I am for the Gold Standard myself. So I can't argue for the Fed.

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It is inaccurate to say that I hate everything. I am strongly in favor of common sense, common honesty, and common decency. This makes me forever ineligible for public office.
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Beagán agus a rá go maith.

Economic Left/Right: 3.75
Social Libertarian/Authoritarian: -2.87

So am I. The decoupling of the dollar from gold, in favor of our having a "floating" currency, had the effect of robbing the currency of any inherent value. This strikes me as a terrible policy.