Parker2112
10-13-2010, 08:09 PM
http://www.goldalert.com/2010/10/a-case-to-end-the-fed/
With financial markets appearing these days to be at the mercy of every move by the Federal Reserve, one related topic that received widespread attention during the financial crisis but over the past year has taken a back seat is the notion of abolishing the Fed.
Although at first glance many may view this idea as drastic, several well-respected investors and financial professionals are large proponents of it – with their basic premise being that the Fed’s attempt to manage interest rates and its propensity to create money out of thin air are principally responsible for the boom and bust cycles that have plagued the U.S. economy for much of the past century. Notables in this camp include Dow Theory Letters founder Richard Russell, legendary investor Jim Rogers, and Michael “Mish” Shedlock – author of Mish’s Global Economic Trend Analysis. (Incidentally, each of these individuals has also been a long-time gold bull).
While these men are well known by many in the investment community, another individual to recently state his case for an “orderly dissolution” of the Fed is Jim Powell, a senior fellow at the Cato Institute and the author of “FDR’s Folly,” “Wilson’s War,” and “Bully Boy,” among others. In an Investor’s Business Daily (IBD) editorial (http://www.investors.com/NewsAndAnalysis/Article.aspx?id=550150), Mr. Powell provides a damning critique of the central bank, citing numerous examples throughout the past century in which he believe the Fed made disastrous economic decisions due to political pressures.
Powell cites was commentary in 1971 from then-Fed President Arthur Burns, who after expanding the money supply in an attempt to reduce unemployment to get President Richard Nixon re-elected , was caught on tape saying “I have done everything in my power to help you as president, your reputation and standing in American life and history … . No one has tried harder to help you.” What followed, Powell contends, contributed to the Great Inflation of the 1970s.
Powell subsequently points to many instances in which Alan Greenspan and
Ben Bernanke failed to foresee the unintended consequences of their never-ending easy monetary policies and contends that it is absurd that monetary policy in the U.S. continues to be run by those individuals who created the problems in the first place. As such, he concludes his argument by stating that “It’s time to begin planning for an orderly dissolution of the Fed before it does us any more harm.”
With financial markets appearing these days to be at the mercy of every move by the Federal Reserve, one related topic that received widespread attention during the financial crisis but over the past year has taken a back seat is the notion of abolishing the Fed.
Although at first glance many may view this idea as drastic, several well-respected investors and financial professionals are large proponents of it – with their basic premise being that the Fed’s attempt to manage interest rates and its propensity to create money out of thin air are principally responsible for the boom and bust cycles that have plagued the U.S. economy for much of the past century. Notables in this camp include Dow Theory Letters founder Richard Russell, legendary investor Jim Rogers, and Michael “Mish” Shedlock – author of Mish’s Global Economic Trend Analysis. (Incidentally, each of these individuals has also been a long-time gold bull).
While these men are well known by many in the investment community, another individual to recently state his case for an “orderly dissolution” of the Fed is Jim Powell, a senior fellow at the Cato Institute and the author of “FDR’s Folly,” “Wilson’s War,” and “Bully Boy,” among others. In an Investor’s Business Daily (IBD) editorial (http://www.investors.com/NewsAndAnalysis/Article.aspx?id=550150), Mr. Powell provides a damning critique of the central bank, citing numerous examples throughout the past century in which he believe the Fed made disastrous economic decisions due to political pressures.
Powell cites was commentary in 1971 from then-Fed President Arthur Burns, who after expanding the money supply in an attempt to reduce unemployment to get President Richard Nixon re-elected , was caught on tape saying “I have done everything in my power to help you as president, your reputation and standing in American life and history … . No one has tried harder to help you.” What followed, Powell contends, contributed to the Great Inflation of the 1970s.
Powell subsequently points to many instances in which Alan Greenspan and
Ben Bernanke failed to foresee the unintended consequences of their never-ending easy monetary policies and contends that it is absurd that monetary policy in the U.S. continues to be run by those individuals who created the problems in the first place. As such, he concludes his argument by stating that “It’s time to begin planning for an orderly dissolution of the Fed before it does us any more harm.”