Banking US Federal Reserve / Essay

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S. government is limping along. Across the Atlantic, the fallout from the crisis has been even worse. Greece is broke. Ireland is broke. And Spain looks like it's about to go broke. Ireland suffered because, because after having implementing the euro, its interest rates were positioned by a European central bank more familiar with French needs than Irish ones. Ireland's financial system including its tax cuts and public service bloat came to depend on a housing boom caused by those histrionically low rates, but in the end the boom collapsed (Berg, 2010).

Inflation is currently around ten percent and appears to be going much higher over the next few years. Everyone knows that inflation harms stock and bond returns. And for customers, inflation affects them because of the higher prices of goods and services without proportionate salary increases. Inflation also reduces the buying capability of savings. The Federal Reserve is theoretically supposed to protect customers against inflation by elevating interest rates in an appropriate manner. It seems though that, they feel otherwise, deciding as an alternative to guard the banks. As a result, the printing of over $1.2 trillion for a bank bailout has emphasized inflationary results. On the contrary, the European Central Bank has preserved its promise to guard customers against inflation for the reason that it understands customers have no other way to get away from this destructive force.

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As a consequence, the dollar persists to grow weaker against the Euro and nearly all other currencies out there (Using Oil Trusts to Beat Inflation, 2008).

One could make the case that the Chairman of the Federal Reserve is the second most vital man in the world. Alan Greenspan who finally stepped was replaced by Ben Bernanke as this man. Although it is still way too early to try to evaluate the old with the new, there have been a number of symbols that Bernanke is going to be taking a dissimilar route in his role as Fed Chief. Greenspan was seen as a mastermind while in office, but as time has gone by, the Greenspan heritage seems to be wearing away little by little. The common feeling of Greenspan has absolutely changed to where most people identify that he was a leader for inflation who was scared to let the markets correct themselves in order to stay away from shaping bubbles. it's pretty easy if one really thinks about it. The majority of Americans base their vision of the overall economy on the stock market. it's now up to the people to come to a decision about which is superior. The Greenspan method of cutting rates early in order to assist the market make the right choice or Bernanke's choice to wait and see (Money Face-Off: Alan Greenspan vs......

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