Gutsy Guy Tells the Fed to Shut Down and Go Home
Imagine telling Fed officials - right to their faces - that they should shut down operations and go home. It wasn't testimony before Congress; it wasn't Ron Paul (who's basically been saying this for years). It was a guy named Robert Wenzel and he said it right there at the New York Fed.
Last time I suggested you read Jim Grant's speech to the Fed. This time I urge you to read Robert Wenzel's speech. You can just click HERE to find it. Wenzel is a bona fide "Austrian" economist. They're the economists who follow the ideas of Ludwig von Mises, Frederick Hayek and Murray Rothbard. But you don't have to know anything about any of these economists to appreciate a lot of what Wenzel has to say.
Here are three points that will mean something no matter what you know about economics:
1) Since the Fed was founded, consumer prices have increased 2,241%
So if you worked hard for your money and saved it for a rainy day at any point from the founding of the Fed in 1913 until today, that money would be worth less from the time you save it until you spent it sometime in the future. We all accept that as a fact of life these days. We all accept "inflation" as a simple fact of life. It's inevitable, right? Economists and investment advisors will tell you about this and then tell you you have to invest your money in the stock market to stay ahead of inflation. They'll tell you that you have to invest in stocks - that you have to take risk - to be able to stay ahead of inflation.
But does that really make any sense? Why should you have to do that? Yes, I realize that your money will lose purchasing power over time if you just leave it in cash. But my point is, does that sound fair to you? Why should you have to take risks to simply preserve what you worked hard for in the first place? The answer, of course, is that you have to because of the Fed and its policy of increasing the money supply over the last hundred years. There's no other reason that you have to take risks. Which brings us to point 2.
2) Wenzel warned of the crisis of 2008; Bernanke didn't.
So why do we listen to Bernanke? You have to read Wenzel's recounting of the months of 2008 where he was posting his warnings. You'll also see Bernanke's comments about how everything was going to be just fine. But hardly anyone listens to Wenzel. Bernanke, on the other hand, seems to make the news every other day. Now for point 3.
3) Why wouldn't the Fed promote policies that increase our purchasing power, rather than policies that make our money worth less over time?
This is a similar point as that made by Jim Grant in his speech to the Fed. It's worth reading Wenzel's comments, as he uses different examples. Or...
You could just figure that if you're not an economist you won't really understand what this guy's saying.
You'd be wrong. But maybe this will entice you to read the speech, since it's really not long. Just picture the guy standing right there at the New York Fed and finishing up with this:
The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out.
Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat.
Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.
Pretty gutsy, don't you think?
Last time I suggested you read Jim Grant's speech to the Fed. This time I urge you to read Robert Wenzel's speech. You can just click HERE to find it. Wenzel is a bona fide "Austrian" economist. They're the economists who follow the ideas of Ludwig von Mises, Frederick Hayek and Murray Rothbard. But you don't have to know anything about any of these economists to appreciate a lot of what Wenzel has to say.
Here are three points that will mean something no matter what you know about economics:
1) Since the Fed was founded, consumer prices have increased 2,241%
So if you worked hard for your money and saved it for a rainy day at any point from the founding of the Fed in 1913 until today, that money would be worth less from the time you save it until you spent it sometime in the future. We all accept that as a fact of life these days. We all accept "inflation" as a simple fact of life. It's inevitable, right? Economists and investment advisors will tell you about this and then tell you you have to invest your money in the stock market to stay ahead of inflation. They'll tell you that you have to invest in stocks - that you have to take risk - to be able to stay ahead of inflation.
But does that really make any sense? Why should you have to do that? Yes, I realize that your money will lose purchasing power over time if you just leave it in cash. But my point is, does that sound fair to you? Why should you have to take risks to simply preserve what you worked hard for in the first place? The answer, of course, is that you have to because of the Fed and its policy of increasing the money supply over the last hundred years. There's no other reason that you have to take risks. Which brings us to point 2.
2) Wenzel warned of the crisis of 2008; Bernanke didn't.
So why do we listen to Bernanke? You have to read Wenzel's recounting of the months of 2008 where he was posting his warnings. You'll also see Bernanke's comments about how everything was going to be just fine. But hardly anyone listens to Wenzel. Bernanke, on the other hand, seems to make the news every other day. Now for point 3.
3) Why wouldn't the Fed promote policies that increase our purchasing power, rather than policies that make our money worth less over time?
This is a similar point as that made by Jim Grant in his speech to the Fed. It's worth reading Wenzel's comments, as he uses different examples. Or...
You could just figure that if you're not an economist you won't really understand what this guy's saying.
You'd be wrong. But maybe this will entice you to read the speech, since it's really not long. Just picture the guy standing right there at the New York Fed and finishing up with this:
The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out.
Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat.
Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.
Pretty gutsy, don't you think?
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