Murray N. Rothbard explains in 3 minutes why it is that when economic downturns happen the government should just get out of the way. Let prices correct, the pain will be short and sharp but then life will go on, typically in a more prosperous manner.
Goldman and the Fed are very close. Let’s just say they vacation together. Share a beach house in the Hamptons.
End the Fed. But Volker at least had the guts to raise rates to insane levels and effectively crushed 1970s inflation. If we had sound money he would not have had to do that of course. (Nor would he have had the power.)
Of the 4 chiefs still alive Volker is my favorite. Or at least the one I dislike least.
Scalise discusses a number of things in the attached interview, including the Keystone Pipeline, the minimum wage, and “bipartisanship” (fear bipartisanship). But the most important nugget is that it looks like Congress will force a Fed audit onto Obama’s desk and he will have to sign it or veto it.*
The bankers are all sighing with relief. It looks like they weathered yet another fit in the markets.
Is there a “Yellen put” in place? Yes. But more accurately it is a “Federal Reserve put.” It’s been around for quite a while. We don’t have real prices. We don’t have a real market.
Also one thing which is not really discussed often in depth is the degree to which the petrodollar plays into all of this. Oil goes down in price, the dollar typically goes higher (and vice versa, also oil is priced in dollars on the world market) and lower fuel prices juice the American economy. It may be that fracking, and the oil supply it has created (along with a Saudi Arabia which has turned on the spigots, likely to hammer the economies of Russia and Iran who are both hurt by a Saudi created glut) is actually the most important “monetary” tool right now.
If it does, and eventually it will, watch out. We will enter completely new economic territory. You think things have been wild since 2008? If people truly call out the emperor as naked, if that becomes the consensus, holy moly, are things going to get interesting.
This is a great video. Peter Thiel of Paypal fame (he was also the first investor in Facebook, among other things) speaks of the “slow impoverishment” of the United States through inflation and regulation.
He is dead on.