What are the chances that President Barack Obama and his Treasury secretary, Timothy Geithner, will ever have anything meaningful to say about monetary policy—beyond continuing to try to coax Federal Reserve chairman Ben Bernanke to print ever more dollars to buy up ever more U.S. government debt? About the same as the interest rate you are receiving on your savings: zero.
While some members of Congress and Republican presidential hopeful Mitt Romney want to label China a “currency manipulator,” little is said about the Federal Reserve’s role as an interest-rate manipulator.
A question on the minds of many people today (increasingly those who manage or invest money professionally) is this: How do I preserve wealth during a period of intense official intervention in and manipulation of money supply, price, and asset markets?
The notion that inflation is harmful is a staple of economic science. But most textbooks underrate the extent of the harm, because they define inflation much too narrowly as a lasting decrease of the purchasing power of money
During the 1992 presidential campaign, former President Clinton’s rallying cry was “It’s the Economy, Stupid.” He sang it to perfection and won the election. Today, the smart politicians (and economists) should realize that “It’s the Money Supply, Stupid.”
Bottom line: A roller coaster economy brought to you by Ben Bernanke by his first draining reserves and his then expanding them is the path we are on.