They call her the “Flying Squirrel.” She has been turning cartwheels since she was three – only 11 years ago. Gabby Douglas was not supposed to be American team leader for women gymnasts – much less the winner of the gold medal for the all-around. But Gabby can twist and twirl better than the Federal Reserve.
While Gabby was doing her thing, the New York Times reported that elsewhere in London the manager of a major hedge fund at Moore Capital Management, returned $2 billion to investors because he could decide how to make money with their money: “The political involvement is so extreme – we have not seen this since the postwar era. What they are doing is trying to thwart natural market outcomes,” declared Louis M. Bacon to the Times. “It is amazing how important the decision-making of one person, Angela Merkel, has become to world markets.”
Now, Bacon has been trying to find a way to make money off Europe’s and the euro’s problems. You don’t need to feel sorry for his dilemma, but you do need to feel sorry for what is going on with Europe’s monetary gymnastics.
Back in the United States, Fed Chairman Ben Bernanke is singing the Carly Rae Jepson hit, “Call Me Maybe.” (Perhaps not coincidentally, both the Harvard baseball team and the U.S. Olympic swim team have videos of the Katy Perry song.)
The New York Times Editorial Board is not pleased — demanding immediate action. In an editorial headlined “The Mañana Bankers,” the Times complained: “How bad do conditions have to get before the Federal Reserve and the European Central bank new steps to support economic growth?....Despite ample evidence that the economy is weakening, the Fed chairman, Ben Bernanke, and the Fed policy committee decided on Wednesday not to undertake any additional monetary stimulus. Then, on Thursday, the E.C.B. also punted.”
Well, you don’t have to be a fan of Bernanke or Mario Draghi to wonder if their past efforts have poured water or gasoline on the fire that seems to be destroying economies around the world. So, maybe a bit of un-Olympian humility is called for.
Even better, Bernanke and Draghi might reconsider if they are playing the right sport – according to the right rules. Maybe they need to rethink the way they approach the sport – and keep changing the ground rules. A good game requires good rules.
A good monetary policy requires even better rules. Rules based in economic reality. Rules based on tangible value. Rules based on the gold standard.
George Gilder, whose new book publishes today, is one of the original pillars of Supply Side economics. As stated by Discovery Institute, which he co-founded, “Mr. Gilder pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute’s Economic Roundtable, as Program Director for the Manhattan Institute….”
He was the living writer most quoted by President Reagan. And he is back with his most brilliant work yet — one of potentially explosive importance if taken to heart by our political and policy thought leaders. It is a radical guide, with surprising insights on almost every page, to the creation of a new era of vibrant prosperity.
As reviewer Paul Brodsky, a professional investor in New York City, perceptively notes,
"Lewis Lehrman is one of a very small group of contemporary gold advocates able to successfully bridge the gap separating practical conservative intellectualism from fleeting, half-baked idealism. His CV lists great success across many fields including education (degrees and teaching fellowships from Yale and Harvard); industry (past president of Rite Aid); politics (narrow loser to Mario Cuomo in the 1982 New York governor’s race); finance, (past Morgan Stanley managing director); private sector entrepreneur (founder, L. E. Lehrman & Company); public sector advocate (founder, Lehrman Institute); historian (author, Lincoln at Peoria: The Turning Point); and recognized philanthropist (awarded the National Humanities Medal by George W. Bush in an Oval Office ceremony). ... Only someone erudite and elegant in demeanor could hope to pull it off . In an irreconcilably over-leveraged world where irritated bond vigilantes question economic sustainability and angry Tea Partiers protest the immorality of it all, Lehrman’s views are considered and his convictions carry weight. He brings gravitas to his cause, and he does so from within as a member of the club."
Before the Fed: JP Morgan Summons the Bank Presidents
"Finally, on the night of Sunday, November 2, Morgan summoned the presidents of the major New York banks to his new library, at the corner of Madison Avenue and Thirty-sixth Street, an Italian Renaissance-style palace he had built next door to his house to showcase his collection of rare books, manuscripts, and other artwork. Its marble floors, frescoed ceilings, walls lined with tapestries and triple-tiered bookcases of Circasian walnut, crammed full of rare Bibles and illuminated medieval manuscripts, made it an incongruous setting for a meeting of the banking establishment. Once the moneymen had gathered, Morgan had the great ornamental bronze doors to the library locked and refused to let anyone leave until all had collectively agreed to commit a further $25 million to the rescue fund."
— Liaquat Ahamed, Lords of Finance (Penguin Books, 2009, p. 54)
Lately we have been engulfed by headlines reporting financial turmoil on every continent, in almost every nation, large and small. The commissars of central planning who so marred the history of the 20th century have been replaced by central banks in the 21st. In Cyprus, the new leadership now dares to confiscate citizens’ wealth with a one-time tax of up to 60 percent on bank deposits above 100,000 euros. Self-interested prime ministers blame continental monetary policies for instigating the currency wars that they themselves surreptitiously carry on.
America recently celebrated — well, maybe we didn’t celebrate – the 80th anniversary of Franklin Roosevelt’s action to end to the gold standard. But America is also celebrating – well, maybe not everyone is celebrating – the 100th anniversary of the legislation creating the Federal Reserve System.
As Lewis E. Lehrman...
Constitution.org provides an extensive and thoughtful Memorandum of Law by Larry Becraft, Esq., of Huntsville, Alabama, on Article I, Section 10, clause 1 of the US Constitution.
Sir William Blackstone courtesy of Wikipedia
One of many interesting matters the Memorandum treats is Blackstone's Commentaries, a book that was a fixture in the...