www.RonTravisSr.com by Ron Travis


  1. The Federal Reserve is another entity that was designed to be independent and perform their primary functions to keep United States currency strong; interest rates stable and realistic, and inflation in check. They can do these things while monitoring sensitive commodity prices.
  2. Politicians have influenced the Federal Reserve to try and stimulate job creation and other political ends. This has led to unjustified low interest rates, liberal credit policies, and runaway inflation in the housing industry and automobile industry, over the past ten years including 2011.
  3. The money supply, or monoterary expansion has resulted in the wildest speculation in building during the past fifteen years. Young couples, who could not afford them, were granted 100% loans for new homes. Many people purchased Condominimus in Florida thinking they could "Flip" them for a profit before they had to come up with the money to close. Dealerships gave five-year interest-free loans on new automobiles to people who could not afford them. The bubble always bursts and many home values dropped 50% in 2006 and 2007.
  4. Many employees have been laid off or fired due to the adjustment that was predictable and avboidable if the Federal Reserve had stuck to their primary monetary policy goals.
  5. Another unintended effect of the artificial low interest rates is that our retirees and other conservative savers who depend on their interest income are punished with much lower income. The lower income reduces their investment and purchasing power, exasperating the economic downturn.
  6. The low interest rates also result in lower earnings accrued for the Social Security trust fund, reducing the fund balance when compared to the net-present value of future projected benefits.
  7. I personally believe that a healthy economy and monetary policy would result in the long-term Federal bond rate ranging between 5% and 8% with an average of 6 ½%; and inflation ranging from 2% to 5% and averaging about 3 ½%. This should provide for a strong dollar and sustained economic and job growth.