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The Fed Should Be Kept Independent?

Tuesday, February 21, 2017 19:50
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(Before It's News)

from The Daily Bell:

President Trump, Keep The Federal Reserve Independent – It’s Too Expensive Not To … There is talk about that Donald Trump and his administration will try to bring the Federal Reserve to heel with some appointments to the board of that body. … But there’s a definite limit to how far this should go for, as not enough people know, the point of the Fed is to curb the enthusiasms of the politicians. And not leaving it operationally independent would be very expensive indeed, so much so as to be entirely counter productive. – Forbes

According to this article, it is better to leave the Federal Reserve alone because to do anything else within the context of a viable Fed would cost too much.

The article does admit that it is possible to change the Fed. In fact Patrick T. McHenry (R-N.C.), vice chairman of the House Financial Services Committee, has already written to Janet Yellen indicating she has no authority to engage in certain regulatory practices.

Citing the “clear message by President Donald Trump” to put America first, he called on her to cease all international negotiations on regulations covering bank capital, systemic risk and other areas, and suggested that the Fed had no authority to engage in such activities.

McHenry went on to call the Fed’s activities “secretive,” and suggested that its participation in international forums was “killing American jobs.” His letter echoes the heated rhetoric by President Trump during the campaign in which he said that Yellen should be “ashamed of herself” for keeping interest rates low for political reasons.

This is a big battle shaping up regarding the Fed. The Fed apparently has not been given authority to carry out international negotiations. It’s not even an international body.

On the other hand, the Fed has to carry out these negotiations within the context of its growing globalism. Otherwise it has to admit its merely one more bureaucratic institution with a job to do. The Fed was not set up in this way.

The Fed has always exceeded its boundaries. In fact, it has never recognized boundaries to begin with. From near to its beginnings, in the 1920s, the Fed did much that was illegal. It consistently issued more notes than it had gold backing.

But this article argues nonetheless that the Fed’s independence is a very “valuable thing.”

The article point out that Trump can fill up to three vacancies on the board this year. So the central bank may not be exempt from a Trump-led shakeup, strategist, Mark Grant said on CNBC on Monday.

“The Fed of today is not going to be the Fed of tomorrow,” the chief strategist at Hilltop Securities said to “Squawk Box.”

< Read More @ TheDailyBell.com

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