“The great thing about fact based decision is that they over rule the hierarchy.”
-Jeff Bezos
Many of our large institutional investing clients we speak with here at Hedgeye remain focused (and rightfully so) on the direction of leadership at the Federal Reserve. Given their focus, we thought we would go ahead and highlight a few fun (frightening?) facts about the mighty Fed:
1) The greatest long term period of economic growth in the United States? That was between the Civil War and 1913 when there was no Fed.
2) Prior to the creation of the Federal Reserve, the estimated rate of inflation in the United States was 0.5%. It is estimated to be at 3.5% in the ensuing century.
3) The permanent income tax was introduced the same year as the Federal Reserve.
4) Congress promised in 1913 that if the Federal Reserve Act was passed ... it would eliminate the business cycle.
5) The value of the U.S. dollar has declined, by some estimates by more than 95% since the Fed was created.
6) There have been 10 recessions since 1950 (arguably many Fed induced).
I borrowed some of these points above from a blog called End of the American Dream. It kind of begs the question, as Jeff Bezos would say, whether the best fact-based decision is to overrule the Federal Reserve hierarchy in its entirety.
Now take a moment to ponder the points outlined above, and then ask yourself: Would ending the Fed be the worst decision the Federal Government ever made?
Unlikely.
Click here for more information on how you can subscribe to Hedgeye Risk Management Research.
