A Piece Of My Mind
My
friends and neighbors, I thank you for this opportunity. You know, we are
friends and neighbors. Grant's makes its offices on Wall Street, overlooking
Broadway, a 10-minute stroll from your imposing headquarters. For a spectacular
vantage point on the next ticker-tape parade up Broadway, please drop by. We'll
have the windows washed.
You
say you would like to hear my complaints, and, on the one hand, I do have a
few, while on the other, I can't help but feel slightly hypocritical in
dressing you down. What passes for sound doctrine in 21st-century central
banking—so-called financial repression, interest-rate manipulation, stock-price
levitation and money printing under the frosted-glass term "quantitative
easing"—presents us at Grant's with a nearly endless supply of good copy.
Our symbiotic relationship with the Fed resembles that of Fox News with the
Obama administration, or—in an earlier era—that of the Chicago Tribune with the
Purple Gang. Grant's needs the Fed even if the Fed doesn't need Grant's.
In
the not quite 100 years since the founding of your institution, America has
exchanged central banking for a kind of central planning and the gold standard
for what I will call the Ph.D. standard. I regret the changes and will propose
reforms, or, I suppose, re-reforms, as my program is very much in accord with
that of the founders of this institution. Have you ever read the Federal
Reserve Act? The authorizing legislation projected a body "to provide for
the establishment of the Federal Reserve banks, to furnish an elastic currency,
to afford means of rediscounting commercial paper and to establish a more
effective supervision of banking in the United States, and for other
purposes." By now can we identify the operative phrase? Of course:
"for other purposes."
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