This means that the regime of irredeemable currency, depending as it is on the open market operations of the Fed for its existence, imparts a definite bias to the interest rate structure establishing a falling trend, whereas interest rates would be stable in the absence of that regime. This in itself is a condemnation of irredeemable currencies as they introduce an unwarranted bias into the economy favoring debtors and spenders while punishing creditors and savers. In addition, it favors the financial sector at the expense of the producing sector. Falling interest rates, as opposed to low but stable ones, are detrimental to productive capital.
Thus we have two effects to reconcile as a consequence of money-creation by the Fed: an inflationary and a deflationary one. We cannot say which of these two forces will ultimately prevail without digging deeper.
Some heavy wading in the economic waters but, suffice it to say, the monetary policies of the Fed and Congress are hostile to production and supportive of debt and spending.
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