Greenspan hints at Fed's end
In an effort to correct America's economic woes, some economists have suggested an end to the Federal Reserve Board.
Forbes, for example, published an article by Nathan Lewis on March 14 titled: “If Alan Greenspan Wants to ‘End the Fed,' Times Must be Changing.”
As the world's leading central bank, the Fed's demise would certainly signal a new monetary age.
The Fed is uniquely powerful and privileged. It possesses the monopoly of creating the world's Reserve Currency, the U.S. dollar, by which all major raw materials are priced. It is this control of the Reserve Currency and the setting effectively of international interest rates that makes the Fed the world's most powerful central bank. Unlike any U.S. corporation or individual, the Fed is subject neither to tax nor audit. Amazingly, it is owned privately and not by the U.S. government.
Since the Fed opened its doors in 1914, the dollar has been reduced in value by some 98 percent. Dollar debasement has effectively helped to impoverish all Americans, especially the working middle class who do not benefit from many government handouts.
The Fed also has instigated a sometimes covert international currency war as trading partners have sought to protect the price competitiveness of their exports into the lucrative American consumer market. Often camouflaged temporarily by monstrous government debts, this has spread the effects of middle-class impoverishment to many other countries.
“… Some mechanism has got to be in place that restricts the amount of money produced, either to a gold standard or a currency board. …. There are a number of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard,” Greenspan said in the Forbes piece.
The debasement of currency, particularly the dollar Reserve Currency, has not suited the producers of cheap products and raw materials like China and Russia. They swap their exports and natural resources for fiat currency that derives its value from government regulation and is constantly depreciating in value.
Led by China, a group of nations including Russia, oil producers and surplus nations has sought to replace the dollar as the International Reserve Currency. China, the world's largest gold producer and hoarder, has reportedly been pushing behind the scenes for a Renminbi — China's national currency — and gold link to any Reserve Currency.
China appears to be seeking to break the monopoly hold of the dollar for pricing key raw materials and money. China controls more than 95 percent of the world's rare-earth minerals.
Losing International Reserve status would erode severely the power of the United States and its currency. America's vital interests are to ensure that any new world currency is designed around U.S. ideas for a continuation of fiat money, even with a re-establishment of the gold link abandoned by President Nixon in 1971.
Greenspan's vague hints at the need for a global central bank or currency board to replace the Fed may appear less surprising if one recognizes his likely aim of ensuring the survival of a U.S.-sponsored Reserve currency over any Chinese initiative.
John Browne, a former member of Britain's Parliament, is a financial and economics columnist for Total Trib Media. Email him at firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Penguins trade Sutter to Canucks, sign free agent center Fehr
- Victims of sexual violence getting better information about offenders’ status
- Famous African lion reportedly killed by American hunter
- Videos spur dozens to protest outside Pittsburgh Planned Parenthood
- Inside the Steelers: Ventrone suffers right ankle injury
- Steelers RB Archer trying to catch up after tough rookie season
- Pirates third baseman Ramirez’s last ride is about winning a ring
- DOD recommits to CMU software security center with $732M award
- Football coach Loughran settles in at Fox Chapel
- Judge lets New Kensington Ten Commandments monument stand
- Steelers notebook: Backup QB Gradkowski remains out with shoulder issue