An Insider’s Take: How the Fed Ruined the Economy
Let’s start this off with a quote by Ben Bernanke to get your blood boiling:
When the economic well-being of their nation demanded a strong and creative response, my colleagues at the Federal Reserve, policymakers and staff alike, mustered the moral courage to do what was necessary, often in the face of bitter criticism and condemnation.
He has a memoir coming out in October called The Courage to Act. The courage to act!? Artificially inflating the economy with worthless money is about the least courageous thing I can think of.
There was one Fed governor I actually trusted, but he resigned in 2011. His name was Kevin Warsh. Bush appointed him in 2006, making him the youngest Fed governor ever at age 35.
His view is directly in line with people like me and David Stockman. It was appropriate for the Fed to step in with QE1 in late 2008 and early 2009. It kept the banking system from totally melting down out of sheer panic. But after that, they should have stepped out of the way and let the free market engineer its own much-needed correction and re-balancing.
That’s why Warsh resigned. He didn’t believe in the Fed’s asinine policies that launched QE2.
Below is an article he ran with Stanley Druckenmiller, founder of Duquesne Capital, in the Wall Street Journal on June 19, 2014. I’ll let him make the argument himself since he does it so eloquently.
Harry
…click on the above link to read the rest of the article…
