nostranger on Nostr: The Federal Reserve has 3 official mandates, as follows: - 1. Maximise long-term US ...
The Federal Reserve has 3 official mandates, as follows: -
1. Maximise long-term US employment
2. Maintain stable prices (the arbitrary 2% inflation)
3. Maintain long-term interest rates
In her book “Broken Money”, Lyn Alden argues there’s a fourth informal mandate to maintain US financial stability, which is a pre-requisite for the other three.
It’s well known by those who’ve studied the history of money that the US dollar has been world reserve currency since at least 1958, and that the levers pulled by The Fed have trickle-down effects on the rest of the world as a result. What’s less apparent to many, no doubt, is the disconnect between the fact that the Fed’s mandates were designed specifically for the US yet have far-reaching impacts on the rest of the world. This is because the mandates were formed over 45 years before the USD became world reserve currency but were never updated to suit. So in attempting to maintain stability of their own financial system, they end up pushing volatility to many other dollar-dependent countries, sometimes with devastating effects. Here is an excerpt from Lyn’s book
The reader should notice that despite being the issuer of the world reserve currency, none of the Federal Reserve’s mandates say anything about foreign countries. As the issuer of the world reserve currency, U.S. monetary policy decisions affect almost everyone in the world, but the Federal Reserve only officially cares about foreign impacts if those impacts can bounce back and affect the United States’ economy
Excerpt from: "Broken Money: Why Our Financial System is Failing Us and How We Can Make it Better" by Lyn Alden. Scribd.
This material may be protected by copyright.
Read this book on Everand: https://www.everand.com/book/677233019
1. Maximise long-term US employment
2. Maintain stable prices (the arbitrary 2% inflation)
3. Maintain long-term interest rates
In her book “Broken Money”, Lyn Alden argues there’s a fourth informal mandate to maintain US financial stability, which is a pre-requisite for the other three.
It’s well known by those who’ve studied the history of money that the US dollar has been world reserve currency since at least 1958, and that the levers pulled by The Fed have trickle-down effects on the rest of the world as a result. What’s less apparent to many, no doubt, is the disconnect between the fact that the Fed’s mandates were designed specifically for the US yet have far-reaching impacts on the rest of the world. This is because the mandates were formed over 45 years before the USD became world reserve currency but were never updated to suit. So in attempting to maintain stability of their own financial system, they end up pushing volatility to many other dollar-dependent countries, sometimes with devastating effects. Here is an excerpt from Lyn’s book
The reader should notice that despite being the issuer of the world reserve currency, none of the Federal Reserve’s mandates say anything about foreign countries. As the issuer of the world reserve currency, U.S. monetary policy decisions affect almost everyone in the world, but the Federal Reserve only officially cares about foreign impacts if those impacts can bounce back and affect the United States’ economy
Excerpt from: "Broken Money: Why Our Financial System is Failing Us and How We Can Make it Better" by Lyn Alden. Scribd.
This material may be protected by copyright.
Read this book on Everand: https://www.everand.com/book/677233019