“Things are seldom what they seem.” –W.S. Gilbert, “H.M.S. Pinafore”
Nowhere is this more true than in government – which means we have to watch it closely. Unfortunately preconceived notions can make us impervious to events right in front of us and lead us to colossal misperceptions.
Take the Federal Reserve System. (All together now: Please!) Since the central bank controls the money supply, advocates of free markets and market-based money are understandably wary of its power to generate inflation. It’s inflated in the past and has the capacity to do so in the future. So attention naturally goes in that direction.
The problem is that while we’re watching for inflation, we might be missing the Fed’s real mischief elsewhere.
Read the rest of TGIF: The New Fed here.