The Egocentricity of the Present Part 16 of 22
All these complex monitoring arrangements are motivated, at least in part, by the fact that information is costly. Yet it seems to me that Online Trading for Financial Freedom a lot of our recent problems can be attributed to breakdowns in this chain of delegated monitoring. To this end, the secretary of the Treasury has put forward recommendations to modernize and clarify the chain of command of delegated monitoring. We are studying the recommendations he has madeas is the Congress and othersand will contemplate them dispassionately over time.
Meanwhile, the Federal Reserve is doing its level best to facilitate the process of price discovery and adjustment from a period of excess in a manner that restores the efficacy of the financial system.
Here is a simple analogy to help you think about our effort. The Federal Reserve is charged with conducting monetary policy that sustains noninflationary economic growth. We have at our disposal a tool called the federal funds rate, which we set as the base lending rate for the economy. Think of the fed funds Stock & Commodity Trading rate as a monetary spigot, and the Feds goal is keeping the lawn of the economy green and healthy. If we turn the spigot up too forcefully, we will flood and kill the grass with inflation. If we provide too little, the lawn turns brown, starved for money. To get the money from the spigot to the lawn requires a working system of pipes and sprinkler heads.
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