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Is a new Gold-backed dollar the best way to begin phasing-out the Fed?

John Allison is the former chairman and CEO of BB&T, the nation’s 10th-largest financial holding company. He was named one of the 100 most successful CEOs by the Harvard Business Review and since 2009 has been on the Wake Forest University Schools of Business faculty as Distinguished Professor of Practice.

Allison spoke to the Trib about the Federal Reserve Board’s detrimental effect on the nation’s slow recovery from the worst economic downturn since the Great Depression.

Q: Can the Fed be labeled more of a hindrance than a help to the recovery?

A: In my view, absolutely yes. You have a group of government bureaucrats who are in a massive redistribution of wealth in the United States. The Fed, by its own acknowledgement, is holding interest rates lower than they should be. They’re doing that to subsidize homeowners, many of whom bought too-big houses. And who pays for that? People who save money — particularly older people, who are now getting much lower interest rates on their certificates of deposit than they would be getting if we had a market-determined interest rate.

Q: What do you see as the primary problem with the Fed?

A: It’s a group of very smart, highly educated people with good intentions who have a problem they simply can’t solve. I don’t care how smart you are and how many models you have, you cannot really integrate the economic activity of 7 billion people on this planet. The Fed thinks they’re smarter than markets, which in fact they aren’t, and they’re constantly making mistakes.

Q: In the long term, what do you think should be done with the Fed?

A: If I were in charge,…

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