Wednesday, August 10, 2011

The Federal Reserve: "A rogue elephant"

Ambrose Evans-Pritchard, international business editor for The (London) Telegraph, believes that the Federal Reserve Board is engaging in "a dangerous form of social engineering," which unreasonably punishes savers and rewards profligate borrowers. Mr. Evans-Pritchard found QE1 an appropriate response to a collapsing money supply.

He concludes:
An intellectual case can be made that inflation should be raised to 4pc to 6pc in the western world to lift us out of our debt trap. EX-IMF chief economist Ken Rogoff and others have made exactly that argument. Fine. Let debate be joined.

But if so, the Fed needs to state this openly and not carry out a social revolution by subterfuge. Any such decision should be subject to democratic endorsement by elected parliaments.

How can we bring these the central bankers to heel?
We could start by ending the Fed and going to a silver-based currency.

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