It's bad enough that we put our economy and economic well being into the hands of overpaid, aloof, out-of-paradigm ideologues, but when they say stuff like this what do we need them for?
"...the Fed is not as well-equipped with regulatory powers to rein in housing and other asset bubbles as some other central banks. We won’t know until it’s very late." Read here.
That comment was from Stanley Fischer, who I believe is Vice Chair, just under Yellen.
Not well-equipped in its regulatory role?? Seriously??? That's the thing that it has absolute control over.
These people are useless. I say fire them all and close the Fed down. I will take my chances under the old system. Can't do any worse, that's for sure.
10 comments:
How does a country do without a central bank? You COULD HAVE a "private banks only" system. But private banksters are big time criminals. And what would have happened in the massive 2007/8 banking cock-up without those trillions of Fed dollars coming to the rescue.
Many banks would have failed and many individuals would have lost their life savings. As it were, very few banks failed, but many individuals still lost their life savings. We might as well end the Fed and put these assholes out of work.
In the panic of 1907 the "monied interests" put together a financial backstop to end the crisis. They knew they had too much to lose.
I agree with Mike about this and am sympathetic to Ralph's objection. Central banks are about "fighting inflation," which means preventing inflationary expectations from arising. This is nonsense, since the central bank is not able to do this based on the erroneous theories they operate under.
There are four things a central bank does now.
1. conduct monetary policy through setting the policy rate. This can be dispensed with by setting the rate permanently to zero.
2. running the payments system. While some institutional arrangements are needed to do this, it can largely be accomplished in a variety of other ways. Clearing houses already handle a lot of it now.
3. provide liquidity. This is really the essence of the need for a central bank, but it could also be accomplished by the Treasury taking over that function as a component of the payments system.
4. regulation of the financial system. This should be separated from the central bank as a precaution against conflict of interest. A separate agency could be created, or an existing agency designated where there is less potential for conflict of interest to arise.
It makes more sense for the Treasury to issue the currency anyway. The US Constitution vests this power in the legislature, which has delegated it to the Fed. It could just as easily and more logically be delegated to the Treasury.
Similarly, it is more logical for Congress to create or designate a different chief regulator of the financial system in a way that avoids conflict of interest. Why put the foxes in charge of the henhouse in the first place.
TBH I don't really fancy a system where everytime I buy something means I have to check the exchange rate between my banks notes and others.
The Fed is so infiltrated by private bankers that it's effectively a private bank. Mike, I think you'd get along very well with Ken O'Keefe. His Twitter handle is @1worldcitizen.
Ken O'keefe, awesome, he sees the world like me.
Canada has a central bank without the drama.
The rotation between the FED and the private banks is a complete joke. FED = bunch of suckers waiting to be hired by private banks.
Apart of that, stupid monetarism still is the prevalent ideology.
Fisher is another one there who thinks he is running a hedge fund... brags about their "profits" all the time...
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