Who cares for the dollar? Not the Fed, surely!

Fundamental economics tells us that interest rate cut leads to two consequences.

First,
it acts as a disincentive to savings and it simultaneously encourages
spending. The second consequence is far more complex. It moves money
from the hands of individuals to the corporates through two routes:
one, as stated above, it encourages spending in the hands of
individuals -- which means more income to corporates; and, two, it acts
as an dampener for interest-related savings, but encourages investments
into stock markets.

Before one proceeds to critically analyse the Fed,
it is important to note its significance. It is in effect the central
bank of the world. Naturally, it needs to be put under maximum global
scrutiny. Despite such overwhelming requirement there is an important
difference between the Fed and the other central banks. If most of the
central banks are state owned or government controlled, the Fed is an
exception to this fundamental rule.

Readers
may be surprised to note that the US Fed system is neither controlled
by the US government nor is it a private body, subject to oversight by
a Regulator. Rather, as some analyst put it so succinctly, it is a
cartel of private banks. And it is structured in such a manner that its
functioning is absolutely independent and secret -- even the US
President or the US Congress cannot interfere in its working.

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