Foxes, Hen Houses and the Federal Reserve Board

Foxes, Hen Houses and the Federal Reserve Board June 2, 2019

After his first two choices for open seats on the Federal Reserve Board crashed and burned, Trump is now focusing on an administration official named Judy Shelton. True to his pattern, he wants to put someone in charge of an agency who opposes its very existence. She actually wants to return to the gold standard.

Judy Shelton, a senior US official who is being vetted for a job on the board of the Federal Reserve, has attacked the central bank for wielding undemocratic, Soviet-style powers over markets and suggested it should not even be in the business of setting interest rates.

In an interview with the Financial Times at the Trump International Hotel in Washington this week, Ms Shelton called on the Fed to “think about whether they are doing more harm than good”. If appointed to the board, she would be “asking tough questions” about its most basic mission, she said.

… Ms Shelton has long been sympathetic to the gold standard, which the US fully abandoned in the early 1970s in favour of a flexible exchange rate for the dollar. “People call me a goldbug, and I think, well, what does that make them? A Fed bug,” she says. Her big dream is a new Bretton Woods-style conference — “if it takes place at Mar-a-Lago that would be great” — to reset the international monetary system, replacing the current regime, mostly based on floating currencies. Ms Shelton said countries should agree to tie their currencies to a “neutral reference point, a benchmark” — which she envisages to be a “convertible gold-backed bond”.

Oil and coal lobbyists running the EPA and Interior Department. If you haven’t noticed the pattern here, you need to come out of your coma.

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