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Trump’s Fed Picks? More of the Same!
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This week President Trump revealed his final five candidates for Federal Reserve chair. Disappointingly, but not surprisingly, all five have strong ties to the financial and political establishment. The leading candidates are former Federal Reserve governor and Morgan Stanley banker Kevin Warsh and current Fed governor, former investment banker, Carlyle Group partner, and George H.W. Bush administration official Jerome Powell. Gary Cohn, current director of the president’s National Economic Council and former president of Goldman Sachs, is also on Trump’s list.

Trump is also considering reappointing Janet Yellen, even though when he was running for president he repeatedly criticized her for pursuing policies harmful to the middle class. Of course candidate Trump also promised to support Audit the Fed and even voiced support for returning to the gold standard. But, he has not even uttered the words “Audit the Fed,” or talked about any changes to monetary policy, since the election.

Instead, President Trump, in complete contradiction to candidate Trump, has praised Yellen for being a “low-interest-rate-person.” One reason Trump may have changed his position is that, like most first-term presidents, he thinks low interest rates will help him win reelection. Trump may also realize that his welfare and warfare spending plans require an accommodative Fed to monetize the federal debt. The truth is President Trump’s embrace of status quo monetary policy could prove fatal to both his presidency and the American economy.

The failure of the Fed’s post-2008 policies of unprecedented money creation and record-low interest rates shows our experiment with fiat money is nearing its inevitable end. All of Trump’s potential picks are likely to continue the Fed’s current policies. Even the ones who say they favor higher rates will likely bow to the wishes of their friends in the financial and political establishment and make sure any rate hikes are minuscule. Appointing a Fed chair who will continue, or only make marginal changes to, these failed policies will hasten the collapse while making the resulting depression more painful.

Some say that Trump could make a radical change in monetary policy by appointing Stanford University professor and former George W. Bush administration Treasury official John Taylor. Professor Taylor is a leading advocate of a “rules-based” monetary policy. Advocates of forcing the Fed to follow specific rules say this will bring stability and predictability to monetary policy. However, a rules-based policy still allows the Fed to control the money supply and distort interest rates, thus still plaguing the economy with Fed-created bubbles and busts.

Trump would do well to appoint a Fed chair who follows the teachings of the Austrian school of economics and thus understands that the only thing the Fed can do to “fix” the economy is allow the correction to run its course. He should also use his bully pulpit to pass Audit the Fed and legislation legalizing competing currencies.

Fortunately, even if Trump is not speaking out on Audit the Fed, many Americans are demanding that Congress vote on and pass this bill. An increasing number of Americans are seeking alternatives to the Federal Reserve System, such as precious metals and cyber currency.

Another positive development is occurring in the states. Arizona recently passed legislation recognizing gold, silver, and other precious metals as legal tender. Wyoming will consider similar legislation next year. If Congress refuses to act to restore a free market in money by auditing and ending the Fed, more states are likely to pass these laws as more Americans reject fiat currency in favor of real money.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics • Tags: Donald Trump, Federal Reserve 
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  1. Rurik says:

    Dear Ron Paul,

    But, he has not even uttered the words “Audit the Fed,” or talked about any changes to monetary policy, since the election.

    There are many things that have been big disappointments since president Trump took office. But there have been extraordinary victories as well, no?

    From what I understand about him, Justice Gorsuch is chiseled out of the Ron Paul granite of integrity.

    Syria (with Russia’s help) is routing the sub-human orcs that have terrorized that region of the world. And all Trump had to do is stop arming and funding them.

    Many of the GOP traitors to this nation and its Constitution are calling it quits, knowing they face angry voters in the primaries.

    I don’t always agree with men like Judge Roy Moore, but he too seems to have that ever so elusive quality in a leader; integrity. Something you sir, must realize is all too rare.

    We haven’t started a war with Iran or sent aggressive arms to Kyiv. Trump has sounded belligerent towards N. Korea, but I feel it’s a certainty that Kim wants to stay in power, something he won’t be able to do if he’s dead.

    And perhaps most encouraging, is that president Trump seems to be finding common ground with the only Senator in that body that is distinguishing himself as being worthy of that title.

    The more McCain hates Donald and Rand.. the more certain I am that those two men are honorable.

    Professor Taylor is a leading advocate of a “rules-based” monetary policy. Advocates of forcing the Fed to follow specific rules say this will bring stability and predictability to monetary policy.

    I don’t know too much about him, but certainly he’d be a difference in kind (rather than of degree) from anything that Hillary would have appointed, no?

    I’ll keep my fingers crossed that eventually, when Trump feels safe (I suspect that the Fed was behind the JFK assassination), that he’ll again bring up auditing the Fed.

    Another positive development is occurring in the states. Arizona recently passed legislation recognizing gold, silver, and other precious metals as legal tender. Wyoming will consider similar legislation next year. If Congress refuses to act to restore a free market in money by auditing and ending the Fed, more states are likely to pass these laws as more Americans reject fiat currency in favor of real money.

    This, Dr. Paul, seems to me an extremely encouraging development! If the states can circumvent the perfidious fiat paper with tangible money, then this could eventually be a way for us all to ultimately prevail, no? And free our nations from the death-grip of the Fiend.

    Thank you Dr. Paul for all you have done and continue to do for this republic and its people and the principles of being principled. I know it’s its own reward, but so few are able to grasp that.

    And my encouragement to your son, the Senator. The more I watch him, the more I know you must be very proud. As you more than anyone else understands what it’s like to have to associate with cowards and venal traitors in the ZUS congress as a price demanded of honorable men and women and true patriots if they’re going to serve the principles of human freedom and dignity. The highest calling of all.

    With humble gratitude and sincere homage to your ongoing service to this republic, its people, and the principles that once made it a great nation.

    ~ R

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  2. What if the sort of gratuitous audit of the Federal Reserve that Dr. Paul demands just doesn’t find anything that supports his fantasies about the Fed as a criminal organization? Then what?

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  3. The U.S. government can destroy gold’s alleged value immediately by refusing to consider anything made of gold a form of property, with the laws in the various states following suit.

    That means you couldn’t seek legal redress for the theft of anything made of gold, because as far as the law goes, you’s lost possession of worthless rocks. The IRS and other government agencies would also refuse to confiscate anything made of gold in, say , asset forfeitures; you have to pay up with U.S. dollars, but you couldn’t acquire them by selling gold. And you also couldn’t get insurance for your gold baubles, for the same reason.

    In other words, gold currently has value because the state says so, not because of anything “intrinsic” about it. Fiat money has value for the same, po

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