Review of End the Fed in Bloomberg
Here is the link to the entire article by James Pressley: http://www.bloomberg.com/apps/news?pid=20601088&sid=a.SdDcVd...
I skip the beginning, and quote the end of the article:
'There are two snags. The first is that financial markets aren’t as efficient as economic theorists have hypothesized. If you don’t believe me, read Justin Fox’s history, “The Myth of the Rational Market” (HarperBusiness).
The other hitch is that banks play a unique role in society -- a role that even Adam Smith recognized, as Henry Kaufman writes in “The Road to Financial Reformation” (Wiley).
“The great champion of laissez-faire recognized the special character of banks as custodians of wealth, and the risks to society if they are left in irresponsible hands,” says Kaufman, a former Salomon Brothers Inc. managing director.
If we’re stuck with the Fed, we had better find a way to fix it. And that means understanding the muddled thinking that underpins central-banking decisions, as George Cooper has explained in “The Origin of Financial Crises” (Vintage).
Schizophrenic Fed
Cooper, a fixed-income fund manager at BlueCrest Capital Management Ltd. in London, argues that central bankers are schizophrenic. When the economy is bubbling, they behave like Friedmanites, leaving the market to do its thing. Come a slowdown, though, they turn Keynesian, rushing to stimulate the economy with rate cuts. That’s how the Fed allowed excess credit to build up, cycle after cycle, inflating asset prices into what George Soros calls a “super bubble.”
Cooper’s solution: Oblige central banks to prick such bubbles by occasionally withdrawing liquidity from the market in what he calls “fire drills.”
This is unlikely to satisfy Paul, who deplores the “scoundrels at the Fed.” So perhaps he should reflect on the Panic of 1907, which ultimately led to the Fed’s founding.
When massive gold shipments drained into the U.S. from London after the San Francisco earthquake of 1906, the Bank of England moved to stanch the outflow by raising its benchmark interest rate to 6 percent from 3.5 percent, as Barry Ritholtz of research firm FusionIQ writes in “Bailout Nation” (Wiley). Other European banks followed suit.
To Ritholtz, the moral is clear:
“Unless all nations agree to do so simultaneously, the dissolving of a central bank amounts to the economic equivalent of unilateral disarmament.”'
In terms of the two snags, the author seems to argue that central banks are special and can be more efficient than inefficient free markets. I disagree with these statements, and the author does not offer further details in favor of these arguments.
In terms of the panic of 1907, would someone please explain to me why gold flowing from London to the US and interest rate increases by European central banks amounts to a unilateral disarmament of the US? Thanks in advance.
Bloomberg author absouletly a socialist
Declaring "Absolutely" after stating Paul's position that "[c]entral bankers are central economic planners" completely confirms this lackey's socialist horizontal leanings as he goes on to defend this evil institution.
Like so many of our "mainstream" thinkers, the author riddles himself with contradictions. The Fed is "schizophrenic," but more central economic planning can fix that. LOL!
Free currency in a free market is what scares the Federal Reserve. The last thing they want to see is people in charge of their own money. That isn't utopian, as the author indicates, but as Paul says, it is revolutionary.
#$#We need to build political strength and political will^%^
We need to build political strength and political will.
Key assumption is wrong
This guy is going on and on about how the free market isn't rational, so Austrian economics is wrong.
But Austrian economics doesn't say the free market is rational. It just says it reflects true information about supply and demand.
People are, unfortunately, quite irrational a lot of the time. But that's not the fault of the Austrian economists.
I saw this earlier this morning,
It's funny that he is asserting that warring currencies are a good thing and somehow make us stronger. I would say that recent history has proven this beyond all shadow of a doubt, false. It has just fostered imbalances all across the world, and built a global ponzi scheme. Whether he likes it or not, instability and distrust are leading to the re-adoption of gold. Sorry, Pressley.....when my family's life is at stake, I'll take the money that has been around since 700 BC and possibly beyond.
"The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard." - Mises
"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com
I stopped reading after this statement
in the article...
It is like saying something is going to make it true! In the early 2000's, the economy WAS good (albeit phony) and the interest rates were lowered artificially to support low mortgage loans... And when the economy turned sour in late 2007/2008 they lowered them more! They never leave the market to "do its thing!" Poppycock, all of it. Repeating nonsense does not make it true. Besides that, it is not even factually true.
So what is this ass's argument?
That we should standby and watch the FED destroy the dollar? I heard lame ass arguments but this one takes the cake.
Thomas Jefferson once said, "The natural progress of things is for liberty to yield and government to gain ground."
Well, I guess he called that one.
A Republic, If You Can Keep It
The same BS over and over again
I'm tired of drones who blather on and on about panics before the Fed. That is just so desperately lame.
For all of ya folks - if you want to REALLY understand banks, read Murray Rothbard's Mystery of Banking (http://mises.org/mysteryofbanking/mysteryofbanking.pdf), or even better de Soto's Money, Bank Credit and Economic Cycles (http://mises.org/mysteryofbanking/mysteryofbanking.pdf).
Don't worry, I'm just a normal stupid guy and I could understand 2/3 of this. Some of it was a bit over my head but now everything is much clearer for me. When reading BS like the Bloomberg review, I could see it's ignorantness in all its splendor :]]
Feel free to send the links to both the books to this Pressley guy, to enlighten him, I'm too disgusted.
His whole article is fraught
His whole article is fraught with error. Too tired to go into it, but filled with with the common misconceptions and it appears he is trying to support those lies and misconceptions.
Most likely he is just ignorant.
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Federal Reserve to the American People:
"Catapultam habeo. Nisi pecuniam omnem mihi dabis, ad caput tuum saxum immane mittam."
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Who is John Galt? Vote ███ ███ 2012!
That was really lame
Boy that guy is a name dropper. I think he sited every book he has ever read, but failed to make a coherent arguement.
Thats what I was thinking.
Thats what I was thinking.
Ventura 2012
He negates the fact that...
during the 19th century after the 2nd national bank was abolished we had several national charted banks that were only supposed to be temporary due to the civil war. They had credit creation powers and other debt instruments which account for the booms and busts during those eras. What this reviewer fails to see is when Ron Paul says end the Fed, he means end artificial credit creation. You must have sound money to stop the business cycle.
http://asilenceproduction.com
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dustin@asilenceproduction.com
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http://youtube.com/silencemagazine
A trash, hit piece without logical arguments.
Notice that this review did not discuss HR 1207 with 290 co-sponsors.
The article is simply trash.
Bloomberg writers are biased!
They have been taught since early childhood that central banking is a good thing. No matter how much time you spend explaining that our U.S. central bank, the Fed, is un-Constitutional as Ron Paul has clearly pointed out in his book, the Bloomberg writer won't listen.
The Central bank simply keeps most of the "Power" of money in the hands of a few banking buddies, when it was clearly the intent of the founders to put the "Power" of money into the hands of we the people.
If a free independent person started a new bank under Ron Paul's theory, like any other business, he must try his best to satisfy his customers by competing with other banks. This would be done over a long period of time because trusting someone with handling your money is based on trust.
The Fed banking system claims that the FDIC guarantees all depositors will never lose their money. { false trust } Well I have news for the Bloomberg writer the FDIC insurance company, like the AIG insurance company just a short few months ago,,,is almost broke with something like 88 banks failing in the USA so far this year.
The Fed is using the taxpayers as a backup insurance company, because when AIG failed the taxpayer funded TARP was passed to bail out the Fed, who were well aware of the international banking problems, that their fellow bankers created.
The Bloomberg writer won't get it until he loses his own job and wonders what happened. The world is in a depression because of Fed mistakes, the current price of Gold proves it because prudent investors have bid the price of Gold to just below its all time high in dollars.
beesting
Perhaps the federal reserve
Perhaps the federal reserve should be rephrased as the "third central bank"?
Inviting the layman to wonder what happened to the first two.
"A government of reason is better than one of force." --Thomas Jefferson to Richard Rush, 1820
Laymen don't wonder.
Unless properly directed.
Explore Orthodox Christianity
From the article Washington
From the article Washington Irving: Critic of Loose Money by Sean Corrigan
Excerpts:
For it was in 1907 — exactly a hundred years ago today — that yet another period of bullet-proof optimism saw the heightened application of financial "ingenuity" to the question of how to run an increased level of speculative risk. Then, a series of what we would now call the leveraged buy-outs of numerous banking interests, as well as the legal exploitation of the loosely worded trust company regulations, allowed the credit creation needed for a new breed of gamesters to fuel the outbreak of a classic investment mania.
Once again, infrastructure featured heavily in the excess — this time in the shape of railroads, streetcar (tram) lines, and shipping. Once again, there was intense activity in the commodities market, amid dark mutterings of pools and squeezes. Once again, the withdrawal of international liquidity (here on the part of the Bank of England) led to the first tremors being felt in the fringe of "emerging markets" (namely, those of Egypt, Chile, and Japan). Once again, the failure of an aggressive gambit (the attempted corner of the stock of United Copper) by the leading financial buccaneers of the day — Heinze, Morse, and Thomas — sparked a freezing of credit and an instant collapse in both the securities and the operations of overstretched firms everywhere.
Rescued almost solely by the will and ability of Old Man Morgan — who famously prevailed upon the illustrious stock operator Jesse Livermore to refrain from selling the market even further at its lows — the financial system staggered, but survived and, fortunately for the bewildered many, the resulting business depression was short and sharp, rather than the protracted agony to which such fiascos tended to give rise in the interventionist age which followed.
Not so auspiciously, the whole salutary experience was instrumental in the campaign that culminated in the passage of legislation, in late December 1913, which founded the Federal Reserve and so ushered in the era of permanent inflation, political expansion, and endemic moral hazard in which we still must conduct our affairs.
"A government of reason is better than one of force." --Thomas Jefferson to Richard Rush, 1820
Bloomberg should publish an answer
from Dr. Paul.
This guy is a Fed Lover
He attributes Utopian promises to the revered Doctor. Dr. Paul, in End the Fed, explicitly disavows utopian promises. This man has low reading comprehension and a big media job to protect. Not going to work.
Of course the writer doesn't
Of course the writer doesn't allow comments...
But here's his email
jpressley@bloomberg.net
Here's what I wrote him:
Thanks for reviewing "End the Fed". However I think some of your conclusions were off. You seem to confuse commercial banks, central banks, and then in the case many of the quotes, simply banks. The Fed is a central bank. Ron Paul does not favor getting rid of commercial banks or banking as an institution.
He wants to abolish the Fed. It says so right there on the cover of his book. Something tells me you didn't get much past the cover. It's revealing how you have more quotes from other people than quotes from the book.
Judging by your reading list, you had already made up your mind before you first picked up "End the Fed". I would encourage you to read some of Murray Rothbard's writings, or perhaps Creature from Jekyll Island to better understand economic liberty and how the Fed is an obstacle to achieving it.
Ending the Fed would not be unilateral disarmament. It would be the first step to restoring sound money and trust in free market pricing.
Thanks for your time,
LAME
worst review so far