Interests Rates should be set by Market

On CNBC former Congressman Dr. Ron Paul said, “Interest Rates should be set by the Market, not Central Planners.”

Dr. Ron Paul is very correct on his statement. Most Americans still think that the Federal Reserve’s Bank is a U.S. government bank. This is far from the truth as Dr. Ron Paul has pointed out. The FED as the Federal Reserve Bank is also known is in fact a private organization catering to its own industry benefits with a public facet.

Dr. Paul has rightfully advocated that for the public good, the bank rates should be determined by the market rather than a closed central planning board. The core principle of a capitalistic society should have the free market rule with the demand and supply of goods and services be balanced freely without a central interference.

What brought Dr. Paul to comment about his remarks was that the FED is scheduled to meet soon before the end of 2015 to announce an increase in interest rates. The rationale given for the coming announcement is that the economy has picked up after the recessional years since 2007. The unemployment rate has been down to a very manageable 5 %.

However, with such a recent recovery of economic growth, the labor force has not fully gained its momentum in economic advantage to a better standard of living. Such a quick adjustment to the interest rate might pull back the labor gains. So the public would not be well served as much as to the business industry ownership.

Any controlled interference would not be in the best interests for all which is championing for its free market society.