MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘end the Fed’

The Why On College Tuition Cost

Posted by M. C. on February 12, 2020

One reason Rand Paul wants to end the Fed and “free” “government money”.

Rent-Seeking, The Progressive Agenda and Cash Transfers at ...

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David Stockman on What an Audit of the Federal Reserve Could Reveal

Posted by M. C. on January 4, 2020

The point is, inflation targeting is one of the greatest efforts at misdirection that a government agency has ever concocted. This gives them a license to constantly intervene and meddle in the financial markets—pointlessly fiddling with the whole price structure of debt and equity assets.

There’s about $1.5 trillion of excess reserves in the banking system.

So, they’re paying out to the banks upwards of $23 billion a year in order to keep excess funds on deposit at the Fed, rather than putting it to work in the macroeconomy.

How stupid is that?

https://internationalman.com/articles/david-stockman-on-what-an-audit-of-the-federal-reserve-could-really-reveal/

by David Stockman

International Man: Trump is calling for a weaker dollar and negative interest rates. What does this tell you about Trump’s understanding of economics?

David Stockman: It tells you that he has no understanding of economics at all!

I think Trump is not even a primitive when it comes to economic comprehension. His views are just plain stupid when it comes to exchange rates. He seems to think it’s some grand game of global golf, where the strongest player gets the lowest score.

What sense does it make tweeting as he did recently in attacking the Fed?

According to Trump, the US economy is so much better than the rest of the world’s economies, and therefore we should have the lowest interest rate as a result. It has nothing to do with economic logic or with principles related to sound money. I think he’s just thrashing about trying to create a warning that if things go badly, it’s the Fed’s fault.

The whole narrative on the economy is wrong…

Even John Maynard Keynes himself said that you ought to try to balance the budget and even generate a surplus at the top of the cycle.

We’re right in the middle of the worst kind of economic policy in my lifetime, anyway—going back to the 1960s.

Trump is completely clueless about how we got here, how he got here, and where we’re going…

International Man: The Fed recently said it could increase its tolerance for inflation before it considers raising interest rates. It would be a major policy shift. What’s really going on here?

David Stockman: I think what’s going on is that they’re looking for another excuse to capitulate to Wall Street next time it has a hissy fit because it believes the Fed owes them another shot of stimulus and more liquidity.

Let’s address the underlying issue now. The 2% inflation target is absurd to begin with. There is no historical or theoretical evidence to suggest that inflation at 2% is better for growth and prosperity than inflation at 1.5%, 1%, or even -1%.

This is just made up, just like the money they created that’s been snatched from thin air, adopted as official policy in January 2012.

It becomes a rolling excuse for running the printing press and accommodating both the politicians in Washington, D.C., who want low interest rates so that debts are cheap to finance and the gamblers on Wall Street who want low interest rates because they result in higher asset values and cheaper costs for carry trade speculators.

The idea that we haven’t had enough inflation as it’s measured by one indicator—the Personal Consumption Expenditure (PCE) deflator—is kind of crazy for two reasons.

First, there’s a lot of other inflation measures that say we easily achieved 2% inflation.

The 16% trimmed-mean CPI is a very handy tool. It has the same CPI data at the product code level as that in the regular CPI, but in order to smooth out the monthly figure, it takes out the lowest and highest 16% of individual prices.

It’s probably more accurate than CPI because it removes the outliers but puts them back in as soon as they reach the center of the distribution.

The trimmed-mean CPI has averaged 2% since January 2012. During the last 12 months, it’s reached 2.34%, way over the Fed’s 2% target.

There are lots of issues here…

International Man: There are increasing calls for central banks to combat climate change. The IMF, the European Central Bank, and several others have chimed in. What does this mean, and why are central bankers suddenly so keen on this topic?

David Stockman: This is beyond stupid. What could the central banks possibly do to help the global economies adjust to climate change? Climate change may or may not be happening, and if it is, it’s due to planetary forces that central banks have absolutely no power to impact or counteract…

International Man: If Rand Paul finally gets his audit of the Federal Reserve, what do you think they’ll find?

David Stockman: What he’s going to find is just more detail on the absurdities of what they’re doing already.

I think one that you would look into is this policy called Interest on Excess Reserves (IOER). They targeted that number at 1.55% right now. There’s about $1.5 trillion of excess reserves in the banking system.

So, they’re paying out to the banks upwards of $23 billion a year in order to keep excess funds on deposit at the Fed, rather than putting it to work in the macroeconomy.

How stupid is that?…

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END the FED Rally planned for OKC – Nationwide Nov 22nd ...

 

 

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David Stockman on How Trump Could Really Make US Industry Competitive Again

Posted by M. C. on January 4, 2020

The first thing we need to do is get rid of inflation targeting and try to become more competitive by allowing the market to automatically do it. If the Fed wasn’t in the way, we would have high interest rates and a deflating price system as the economy attempted to adjust to the massive new competition in China.

https://internationalman.com/articles/david-stockman-on-how-trump-could-really-make-us-industry-competitive-again/

by David Stockman

…What do you think of Trump’s trade policies and tariffs?

David Stockman: The trade policies are idiotic. They haven’t improved the trade deficit. And have caused other problems.

We got the numbers in now for 2018 and we had the largest trade deficit in history!…

International Man: If Trump was serious about making the US industry competitive, what could he do?

David Stockman: The best thing he could do is a housecleaning of the Fed.

The Fed’s policies are the number-one enemy of real sustainable growth, job creation, and the American economy.

First, the 2% target inflation is absurd.

We’re in a world where we’re competing with $5-an-hour labor in China and $15 or $18 in South Korea. We should be deflating our economy, not inflating it, because when we inflate a price level, wages go up with it, and we become just that much more uncompetitive in global trade either as an exporter or in competition with the imports coming in.

The American worker isn’t any better off because he got an extra 2% in his wage. He’s paying 2%—if not far more actually—at the grocery store, at the doctor’s office, for education costs, and for transportation.

The first thing we need to do is get rid of inflation targeting and try to become more competitive by allowing the market to automatically do it. If the Fed wasn’t in the way, we would have high interest rates and a deflating price system as the economy attempted to adjust to the massive new competition in China.

The second thing is to get the Fed out of the business of propping up the stock market in fear that if the stock market is allowed to correct, we’ll have a short run of recession—which is true.

Stock crashes lead to recession, owing to this crazy financial engineering that has become the total preoccupation of the corporate C-suites of America…

To summarize, if we started deflating, rather than inflating our economy, if we get the C-suites back into the business of running companies and investing for the long haul rather than financial engineering on Wall Street, it would eventually and slowly heal our competitive situation.

It would lead to more jobs, higher incomes, more sustainable prosperity for the American economy.

But that requires a massive change at the Fed—a housecleaning, of both the people and the models and policies that they use.

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Israel's Dirty Little Secret, by Philip Giraldi - The Unz ...

 

 

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The Ron Paul Institute for Peace and Prosperity : Save Liberty, Shut Down the Government

Posted by M. C. on May 2, 2017

http://ronpaulinstitute.org/archives/featured-articles/2017/may/01/save-liberty-shut-down-the-government/

The root of the current crisis is neither political nor economic but philosophical. Too many have bought into the lie that government can protect us from life’s misfortunes and stamp out evil around the world without endangering our liberty, our safety, and our prosperity. Convincing a critical mass of people to reject big government is key to our success.

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The Ron Paul Institute for Peace and Prosperity : The Federal Reserve Is, and Always Has Been, Politicized

Posted by M. C. on April 18, 2017

http://ronpaulinstitute.org/archives/featured-articles/2017/april/17/the-federal-reserve-is-and-always-has-been-politicized/

While auditing the Fed is supported by the vast majority of Americans, it is opposed by powerful members of the financial elite and the deep state. Therefore, those of us seeking to change our national monetary policy must redouble our efforts to force Congress to put America on a path to liberty, peace, and prosperity by auditing, then ending, the Fed.
David Stock has been even more blunt saying the Fed should go and is led by a simpleton. 

Notice how rates started going up immediately after the election? Yellen has to do it but didn’t want the inevitable repercussions until after Hillary was elected.

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Get Rid of the Fed | The Daily Bell

Posted by M. C. on February 12, 2017

http://www.thedailybell.com/news-analysis/get-rid-of-the-fed/

For Ms. Booth, “slow-moving” Fed economists will inevitably miss what’s really going on and substitute low interest rates for other solutions. Fed Chairwoman Janet Yellen and former Fed leader Ben Bernanke are two of the slow-moving acadmics that come in for criticism.

End the Fed. Hmmm… It has a familiar ring. It is a good idea but someone with a Texas accent said it first.

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