Sunday, January 4, 2009
Jim Grant on the Fed
Jim Grant (JG) has a fine article on the Fed, 20 December 2008 WSJ. David Theroux (DT) wrote of JG's article at Beacon, here: http://www.independent.org/blog/?p=736. Elihu Root's attack on the Fed was in 1912, before the Fed was created. There are few new arguments against the Fed's existence. Some excerpts DT left out: "Who will finance America's annual surplus of consumption over production (After 25 more or less continuous years, almost a national trait)? Inflation is a kind of governmentally sanctioned white-collar crime. Every crime needs a dupe. Now that the Fed has announced its plan to deceive, where will it find its victims? ... Gold is a hard master, and a capricious one, too, insofar as growth in the world's monetary base depends on the enterprise of mining engineers. But as we have seen lately, there is no caprice like the caprice of sleep-deprived Mandarins improvising a monetary solution to a credit crisis (or, for that matter, of fully rested Mandarins setting interest rates by the lights of their econometric models). ... 'If the Goverment can create money,' as a hard-money propagandist put in an 1892 broadside entitled 'Cheap Money,' 'why should it not create all that everybody wants? Why should anybody work for a living?' ."
Absolutely! I made this argument about Americans not having to work in my first economics class! That "Macroeconomics" takes in adults is astounding. Sing "Rainbow Stew", my 28 October 2007 post, link: http://skepticaltexascpa.blogspot.com/2007/10/ben-stein-rides-again.html. America eventually must choose: put your faith in Monetary Mandarins or Gold. George Bernard Shaw wrote in 1928, "At some point, you have to choose between trusting the natural stability of Gold, and the honesty and intelligence of the members of the government. With due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for Gold". Inflation is government sanctioned counterfeiting, my 24 August 2007 post, link: http://skepticaltexascpa.blogspot.com/2007/08/counterfeit-nation.html. What don't adults understand?