“How Bernanke Is Using the Printing Press to Win Friends and Influence People”
That’s the title of my talk at this Saturday’s Mises Circle in Phoenix. (I think they still have room if you are in the area.) CNBC has a very timely story today on this topic:
After two years of secrecy, the Federal Reserve Bank of New York is disclosing key details about billions of dollars of risky investments it bought while rescuing insurance giant American International Group and supporting the sale of failed investment bank Bear Stearns.
Yikes that doesn’t sound very promising, does it? This is my favorite part of the article:
The Fed has said its secrecy was necessary to help rebuild confidence in the financial sector and stabilize the banking system.
Critics argue for more transparency given that the bailouts could have cost taxpayers tens of billions of dollars.
Identifying the assets “would compromise the New York Fed’s ability to maximize value for the taxpayer in the long-run,” New York Fed President William Dudley wrote this month.
It must be tough working for the Fed (or government). You clock in 8 hours a day, sometimes more, doing nothing but try to help the average American. And what do you get in return? Nothing but suspicion.
I mean, if you can’t trust Timothy Geithner to exercise discretion when engaging in multi-billion dollar backdoor bailouts, then where would we be?
It is laughable/cryable that the Fed continues to claim itself responsible for stabilizing the financial industry as well as maintaining a stable dollar. It is ironic that the primary function of money–providing a common denominator to exchange–which among other things, helps businesses calculate the success or failure of their market actions, does not apply to the Fed–the supposed controller or “stabilizer” of the monetary system. We can refer to historical money-prices to interpret how well they’ve succeeded in maintaining a stable currency and stabilizing the financial system; but like any government failure, there is always the claim: “well it would have been much worse without us.” To the Fed’s, erm, credit? they have held true their role as a “lender of last resort.” But for who exactly?
Doesn’t it feel good to be on a “need to know basis” with your own expropriated funds, to be continually told: “and you don’t need to know.”
The Creature from Jekyll Island gets more believable every day.