We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

The legalised counterfeiter

Dr. Bernanke unfortunately does not understand economics, he does not understand currencies, he does not understand finance. All he understands is printing money. His whole intellectual career has been based on the study of printing money. Give the guy a printing press, he’s going to run it as fast as he can.

- Jim Rogers, investor and commentator, giving his considered view on Ben Bernanke, the current chairman of the Federal Reserve.

12 comments to The legalised counterfeiter

  • Laird

    Harsh, but accurate. If the only tool you have is a hammer, everything looks like a nail.

  • Chuck6134

    The moral bankruptcy is readily apparent in our media as no one is creaming bloody murder about a devaluation of the dollar by upwards of at least 20% due to the decision of a handful of apparatchiks. Not even the so called conservatives are screaming loudly…

    This is the biggest kick to the financial nuts of the American citizen since Nixon’s total abandonment of the remnants of the gold standard.

  • Jacob

    What strikes me about Ben Bernanke is that he had no experience in real-life business or banking. He worked his whole life in academy(Link), and then jumped into public service as governor at the Fed (later becoming chairman).

    Many central bank chiefs come from the academy, and that is strange, as I think the academy is a cocoon of groupthink detached from reality.

    See for example this speech of his, from 2005, where he tries to show that the problem of volatility in the economy has been overcome(Link),
    “My view is that improvements in monetary policy, though certainly not the only factor, have probably been an important source of the Great Moderation.”
    He believed that central bankers have managed to flatten the fluctuations of the business cycle…
    So, the last crisis was a surprise to him… he is indeed, totally clueless, as expected with an academician.

  • Laird

    Jacob makes a good point; central bankers do tend to come from academia or government, not real business. But to be fair, I’m not sure precisely what background would adequately prepare someone to be Chairman of the Federal Reserve Board. Have you ever listened to a speech by the Chief Economist of any large bank? One would think such a position would be good training to be a central banker, but they all seem to spout the same Keynsian nonsense. And there’s no way that anyone from the Austrian school would ever be confirmed (let alone nominated in the first place). So where does that leave us?

    Oh, yes: abolish central banks. Duh.

  • Jacob

    Why not make Warren Buffet, or even George Soros the Fed chairman ?
    They probably won’t accept the position. They play for real, with their own money (or money willingly entrusted to them by clients). They wouldn’t like the role.

  • spidly

    I should get the tire on my wheelbarrow fixed soon…..ditch the wallet.

  • Laird

    Buffet and Soros do indeed play with their own (and their clients’) money. Unfortunately, Buffet’s thoughts on macroeconomics are idiotic, and Soros is demonstrably evil (well, anti-western anyway). So the former would be unacceptable and the latter unthinkable (unless, of course, you are of the opinion that someone affirmatively trying to bring down the west would do such an incompetent job that he would inadvertantly end up strengthening it instead, but I don’t share that opinion.)

  • Bod

    In the main, I’d agree with Laird about Chief Economists of major banks, but there are economists and analysts out there who aren’t dyed-in-the-wool Keynesians -people like Albert Edwards (and his apparent mini-me, Dylan Grice) at Societe Generale. Then you have people like Citi’s Buiter and Saunders who are (possibly) somewhat more practical observers of the market. Stuff from these guys, and many others, regularly pops up at ZeroHedge, along with ‘contrarians’ like Gary Shilling, Marc Faber, and any of a number of other astute guys and gals – who just don’t happen to work for the Fed.

    But the problem is – let’s face it – if you’re any good, why would you want to work for the Fed? It’s everything wrong with government employment writ large. Narcissists and egomaniacs are going to be attracted to the job, but *EVEN NOW* (especially with bank bailouts), if you’re worth a candle, you’ll be out there predicting what’s going to happen when the Fed screws up again, and you can get a fat bonus regardless of the level of the Dow, as long as you predicted it was going to go where it did.

    So no, expecting capable heads of the Fed (former intimates of Ayn Rand or not) is wishful thinking.

  • Bod

    Oh, and something that arrived in the mail, from 1792

    Excerpts from the Coinage Act of 1792 ӬAct of 2 April 1792

    1 Statutes at Large 246 CHAPTER XVI. – An Act establishing a Mint, and regulating the Coins of the United States:

    SEC. 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of fine gold or fine silver therein contained, or shall be of less weight or value than the same ought to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offences, shall be deemed guilty of felony, and shall suffer death.

  • Paul Marks

    Seems reasonable Bod.

    Of course there were private mints in the West – till the Feds banned them in the 1850s (and not because the coins were underweight or lacking in purity).

    As for Bernanke – he is terrible.

    He swore (litterally – he was on oath testifying before Congress) that he would never monetise the debt – and he was doing it (in a hidden way) even as he falsely swore (for which he should go to prison). And now he is doing it openly – and without any fear of arrest or prosecution.

    Indeed he can even buy up the debt of personal friends in corporations – because the Federal Reserve system is neither fully audited or under proper oversight. It is a charter for corruption.

    Glenn Beck may rightly hate Andrew Jackson’s brutality towards the Indians, but America needs an Andrew Jackson (or an Andrew Van Buren) now – to end the Federal Reserve.

    “But the national debt depends on it…..” – then default is going to happen, sooner or later this farcical and unsustainable situation must end.

    Indeed in practical terms default is already happening – if you issue new money and buy your own debt (with this money you have just created) that is de facto default.

    “But I have inflation linked American government bonds…..”

    Oh the kindly innocense of some people….who do you defines what American “inflation” is?

    By the way – do not trust all investors.

    For example Goldman Sachs people will give you policy advice that benefits Goldman Sachs (and themselves personally) not advice that will benefit the country.

    I can think of only three big investors who understood a lot of these matters.

    Jim Rogers (who the article cites), Peter Schiff, and James Grant.

  • Laird

    “Andrew Van Buren”? Did you mean Martin Van Buren, the 8th President of the US? Or did you really mean the British illusionist? (Of course, either would probably be better than Obama [or Bernanke]!)

  • Bod

    If they’re going to use illusionists, the least they could do is retain Penn and Teller.

    Come to think of it, those guys do have a reasonably good grasp of how the economy works.