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It might be a little results oriented, but I like the Fed because it has been successful. Since the Depression, there has not been a severe economic downturn (defined by joblessness and GNP) or unmanageable inflation. The economy has functioned particulary well over the last 20 years.

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similarly, look at what happens when we back money with something we can't move like gold. the argument that any fiat based system must fail b/c it has int he past can also be used against any non-fiat based monetary system. every commodity based system has also failed.

human being are irrational in many instances and their irrationality are the causes for business cycles (they 'we' extrapolate recent past trends into the future). unchecked, these mistakes pile up and lead to massive swings in economic indicators and economies in general.

looking at business cycle amplitude is a good indicator of that. booms and busts have been far less impactful (i.e. the economy absorbs them better) than they likely otherwise would be.

further, you can make a perfect foolproof case against the fed, but the fact remains, the alternatives are worse.

the fed is the worst possible option, except for all the others.

Barron