Is the federal reserve at fault for all the economy issues?

Question

The lowering of interest rates has spiraled several economic issues that is destroying the country.

Lower interest rates led to banks making more loans thus lowering their standards and allowing people to purchase houses larger then they can afford. Once foreclosures started the spiral went quickly thus dropping the value of the dollar.

A weak dollar made it harder for us to purchase thing from other countries. ( what percent of the price of a barrel of oil is based on the weak dollar )

Greenspan got out when the getting was good, he treated every issue as a nail, and used his interest rate hammer.

Answer 1

At the most fundamental level you can trace back virtually all of the "economic woes" of today to government decisions to pursue highly expansive monetary policies over the last 6-7 years. By supplying gobs of cheap money, lenders were almost forced into pursuing more and more risk [think about the changes you might personally make in your own investment strategy if you suddenly discovered a couple of more zeros on your bank balance]. Alan Greenspan would probably argue even now that he made the better of the choices available, but I'm sure he understood the potential consequences of those choices -- and crossed his fingers that they wouldn't be too severe.

Answer 2

Oh yes!

I believe the Federal Reserve is intentionally sending us into another Great Depression.  They have done their part in MAKING our dollar weak!  They know exactly what they're doing.  

Watch out People!  Start Gardening!

Answer 3

your need for 14 credit cards, car loans and house payments you cant afford is what did it.

Answer 4

Certainly some but not all economic issues.

- The foreclosure crisis: Absolutely. Regulation of the banking industry is clearly part of the Fed's charter and they missed this one big time.

- The oil price crisis: Probably not. The Fed does little to control prices on a global scale. Inflation hawks might argue for tightening the money supply so far that it depresses the economy to the point of severe declines in oil consumption. But that would be incredibly harmful to the economy as a whole.

With the current and persistant trade deficit, our dollar should be weaker. Other countries should be buying more american goods.

Unfortunately other countries, specifically China and Japan, have an alternative investment for dollars: U.S. debt. About half of our public debt is owned by those two countries. If congress balanced the budget, they would have to use those dollars elsewhere, preferably in U.S. goods.

Answer 5

No I think you have a very good point.

The creation of Billions of dollars, as funny money to sell rights to the Oil producing nations, was a very bad move. Recently  As the dollar began to drop, it made much better economic sense for Oil to  be bought and Traded in Euros. This has most definetly made an enormous impact on the OPEC oil price.  

Why was Iraq raided (among other things) they along with Iran expressed the desire to step away from the convention of trading in US$.  This signalled economic doom for the US dollar.  The war, a relative economic success, because of the spending in US military equipment and technology has propped it up a little.  But If you want someone to blame, blame the Elite Dynasties, Who bankroll the world, they created the game and we were forced to by into it.

THe US should reclaim full control of its Federal Reserve Bank. This would shake the world a little, but settling in its place is a much more equitable trading market.  Or esle things are gonna get much, much worse.

Vote Independent.

The USA is very greedy, and this single event has proven to be most affective. Just not what was planned.

Answer 6

while it would be nice to point to the fed for all the problems, i think we both know that when something like this happens that several factors contributed to it.