Reason #6

We don't need the Federal Reserve System

Rewind to June, 2000. The Fed Funds Target Rate was set at 6.5%, the highest in years, a rate designed to slow down the "irrational exhuberance", as Alan Greenspan described it, of the 1990s. The rate remained at 6.5% through January 2001, when its intended result was in full swing, marking the end of the dot-com era, the demise of the telecom sector, and the beginning if a mini-recession.

Then 9-11 happened. Everybody withdrew and the economy came to a screaching halt. The Fed lowered the rate throughout 2001, until the rate hit 1.75% in January 2002, in an attempt to stimulate the economy in a post-911 era. The plan worked and the economy rebounded sharply in 2003. By July 2004 the all-knowing Fed began to raise rates again, and just a scant 2 years later, had increased the rate to 5.25%. The economy was rolling and needed to be throttled in.

The Fed held this rate steady through September 2007, when it became apparent to all that the housing and financial markets were beginning to unravel. 13 months later the Fed Funds Target Rate had been lowered to 1%... then 2 months after that to just 1/4%, which is basically free money.

So, in 6 years, we saw the rate go from 6.5% to 1.75% to 5.25% to 1/4%. And we expect businesses to be able to predict revenues and profits when they have absolutely no clue what their costs of financing will be. We allow an all-to-powerful fed to engineer wild swings in interest rates with little oversight, and then we blame our financial markets for not having the wisdom to see it coming. This roller-coaster approach to managing financial markets must come to a stop.

Once Texas seceedes from the Union, we will no longer be subject to the whims of the Federal Reserve System.