In October 1907, our country was seized by a serious financial panic during a time when we were already struggling through a recession. The NY Stock Exchange fell nearly 50% across the country. Havoc ensued as people withdrew massive amounts of money from their state and local banks. In response, both bank and business entered a free-fall into fiscal insolvency – most declared bankruptcy.
This was the greatest financial alarm, and most severe. In desperation, the government created an entity to oversee the nation’s monetary system. In December of 1913, Congress enacted the Federal Reserve Act with three primary responsibilities:
- maximize the employment rate
- stabilize prices
- control long-term interest rates
Over time, especially after The Great Depression, the duties and powers of the Federal Reserve were greatly expanded to include:
- over-seeing and regulating the nation’s banks,
- managing the money supply
- offering financial services to the country’s banking institutions and the U.S. government
- maintaining the standing of the U.S. in the world economy
Today, the major responsibilities of “the Fed” is to regulate interest rates and the money supply. In a recession, the Fed will generally lower interest rates and increase the supply of money. This “expansionary” policy is intended to encourage businesses to borrow money, grow and, hopefully, hire more people.
As the central bank of the United States, the Fed is both the “banker’s bank” and the “government’s bank.” Each has its own role to play but together, as a major player in the world’s largest economy, the Federal Reserve is also one of the most powerful players in the world.
Controlling Your Personal ‘Expansionary Economy’
If the Federal Reserve has obtained that much control, over the years, then how do we buffer our personal economy from the mandates of such a large agency? Without inserting opinion on whether central banks are good or bad, the fact is they dictate regulations based on a very sizable picture – the nation’s economy and the global economy.
Just like the power and control that “the Fed” has, how can we ignite that type of control over our personal money? What do you do when your bankroll needs an overhaul, and you’re looking for an “expansionary” flood?
Whole Life Policy
If you need or want to expand your economy, do it with whole life insurance. Inside of a policy your money is protected from inflation and excessive taxes, allowing you options to invest in other performing assets that can grow your wealth. Whole Life Policy Insurance has many benefits including:
- Market protection
- Steady rate of return
- Retirement income
- Family Legacy
Create your own Expansionary Policy that serves yourself, your family and your bank account.
Read: Access Your Savings Tax Free
Watch: Practical Uses of Infinite Banking
FAQ
Q: What is an expansionary policy, and how does it impact economic growth and stability?
A: An expansionary policy is a set of monetary or fiscal measures taken by governments or central banks to stimulate economic growth by increasing spending, lowering interest rates, or implementing tax cuts, which can lead to increased economic activity and job creation.
Q: Why is the acquisition of an expansionary policy important in certain economic situations?
A: The acquisition of an expansionary policy is important during economic downturns or recessions as it aims to boost economic activity, restore consumer and business confidence, and prevent prolonged periods of low growth or stagnation.
Q: What should individuals and investors consider when assessing the potential effects of an expansionary policy on their financial decisions?
A: Individuals and investors should consider factors such as interest rate changes, inflation expectations, and government spending initiatives when evaluating how an expansionary policy may impact their investment strategies and financial goals.
