A government money monopoly, writes Judy Shelton, "invites a more sinister abuse of government power - even tyranny - as government precludes market entry to alternative issuers."
It is the perfect time for Powell to set right the financial sector and establish a return to normalcy.
The Federal Reserve is preparing to cut interest rates for the first time in a decade because it sees a cooling global economy and no sign of overheating in the jobs market at home. AIER President Edward Stringham joins Bloomberg to give his insight.
For hundreds of millions of citizens across the world, digital currencies like Bitcoin, Ripple, and potentially even the Libra don’t pose a threat to financial stability. They offer an escape from chronic financial instability and high and variable rates of inflation that result from poorly managed government monies.
The Fed chairman insists that the central bank will make independent decisions but there is no way fully to insulate monetary policy from politics.
The trade war is heating up. Unfortunately, the Fed’s current framework will exacerbate the damage.
The long history of central banking, and especially over the last 100 years of paper monies and out-of-control government deficit spending partly funded by “monetization” of the debt, has more than clearly demonstrated that the epoch of modern central banking needs to come to an end.
The president’s decisions to nominate Stephen Moore and Herman Cain leave a lot to be desired. But that is no excuse for perpetuating the myth that the Fed has been independent up until now.
There is growing support for the idea that meddling with market interest rates is a bad idea. Interest rates coordinate intertemporal production plans, and any attempt to alter them will entail undesirable unintended consequences.
Government expenditures can be funded by increasing reserves at the Federal Reserve. But limits on the demand for reserves mean inflation will follow.
The Fed has a monopoly on the creation of base money, the fundamental asset underlying the banking and financial system. And over decades, with each instance of financial turbulence, the Fed has become less constrained in how, when, and why it creates base money.