{"id":161586,"date":"2019-12-11T12:37:37","date_gmt":"2019-12-11T17:37:37","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=161586"},"modified":"2019-12-11T12:37:37","modified_gmt":"2019-12-11T17:37:37","slug":"r-i-p-paul-volcker-the-last-good-central-banker","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/12\/r-i-p-paul-volcker-the-last-good-central-banker\/","title":{"rendered":"R.I.P. Paul Volcker, the Last \u201cGood\u201d Central Banker"},"content":{"rendered":"
December 11, 2019<\/div>
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By Money Metals News Service<\/b><\/p>\n

The last true enemy of inflation the Federal Reserve has seen died earlier this week.<\/p>\n

\"Paul<\/p>\n

Paul Volcker, former chairman of the Federal Reserve from 1979-1987, has passed away.<\/p>\n

Credited with tampering incredibly high levels of inflation during the Carter and Reagan administration by jacking up interest rates to unpleasant levels, Volcker\u2019s passing harkens back to a time when central bankers weren\u2019t afraid to make tough choices.<\/p>\n

Volcker instinctively knew that central planning of the economy by tugging on monetary policy levers was not only a tall order, but also wouldn\u2019t ultimately succeed.<\/p>\n

In an interview<\/a> the former chairman said about the Keynesian \u201creligion,\u201d \u201c\u2026I was a bit turned off by the precision and certainty that these people attached to the doctrine. The analytical framework was very convincing but this feeling they had, that they could press the right buttons and manage the economy pretty exactly, for some reason it turned me off.\u201d<\/p>

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Tall Paul (Volcker was reportedly 6\u20197\u201d) was also the last chairman of the Federal Reserve who maintained plausible political independence<\/a>, publicly butting heads with President Carter and President Reagan.<\/p>\n

Though Volcker was one of the main architects of closing the gold window and once declared<\/a> that \u201cgold was the enemy,\u201d he nevertheless seemed at least to understand the severe damage that inflation causes.<\/p>\n

In an interview with PBS, Volcker said, \u201cinflation is thought of as a cruel, and maybe the cruelest, tax because it hits in a many-sectored way, in an unplanned way, and it hits the people on a fixed income hardest. And there\u2019s quite a lot of evidence, contrary to some earlier thinking, that it hit poorer people more than rich people\u2026\u201d<\/p>\n

At a lecture in Singapore in 2008, when asked about a return to fundamentals of the Austrian school of economics as a response to the Great Recession, Volcker acutely answered, \u201cyou know, they [Austrian school economists] have some insights that maybe we have forgotten about\u2026The idea of credit creation being important as one symptom of what is going on has certainly been vindicated.\u201d<\/p>\n

Volcker continued, \u201c[Financial firms, investment banks, and commercial banks] all built up the balance sheet on the liability and asset side because of a sense of easy credit and no problems. That\u2019s what\u2019s come home to roost because suddenly they haven\u2019t got enough capital to support the credit, which wouldn\u2019t surprise most Austrian economists, I suspect.\u201d<\/p>\n

Former Chairman Paul Volcker wasn\u2019t an Austrian economist \u2013 or even a strong proponent of sound money, despite including the term in the title of his memoir. But he understood the perils of inflation and the harm wrought by technocratic manipulation of the economy.<\/p>\n

Volker\u2019s approach stands in sharp contrast to that of current Fed Chairman Jerome Powell and his ilk. Far from fighting inflation, they are openly engaging in a campaign to push it higher.<\/p>\n

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The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Money Metals News Service The last true enemy of inflation the Federal Reserve has seen died earlier this week. Paul Volcker, former chairman of the Federal Reserve from 1979-1987, has passed away. Credited with tampering incredibly high levels of inflation during the Carter and Reagan administration by jacking up interest rates to unpleasant levels, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-161586","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/161586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=161586"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/161586\/revisions"}],"predecessor-version":[{"id":161591,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/161586\/revisions\/161591"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=161586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=161586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=161586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}