Caleb Howe is reporting live from the Jackson Hole Summit, a major financial summit that is attracting the world’s greatest thinkers on money and economics. Look for Caleb’s posts throughout the weekend.
On Friday morning at the Jackson Hole Summit, Judy Shelton of the Sound Money Project and Atlas Network spoke on the subject of the gold standard and addressed the perception that people who even dare to mention it are lunatics or, as The American Spectator noted earlier today, Quixotic. Shelton’s presentation focused in the main on the numbers and the policies. Dr. Shelton pointed out that the Fed can’t seem to face up to a simple, apparent, easily understood fact: Their policies aren’t working.
“The difference between our summit, and the one the Feds are holding up the road, is that they are trying to fine tune a model that is clearly not working. […] They are just not ready to admit that their system is not working.
Shelton also notes, as have several speakers at the Summit, that the Fed’s September meeting is just three weeks away. “Everyone’s wondering what happens if the Fed does raise interest rates? What happens if they don’t.” This highlights the common and easy to grasp theme among the speakers. What sense does it make that the free market holds its collective breath in anticipation of decrees from on high by central planner; by a “committee of wizards” as George Mason University Professor of Economics Dr. Lawrence White put it in the opening talk. Dr. Shelton put it in terms that anyone can understand and appreciate, an encapsulation and packaging process the entire issue of monetary policy has sorely needed.
We dare to talk about the gold standard and its relative merits, knowing that the merest whisper of a gold standard is enough to elicit the guffaws of the central bankers down the road. Because they say “that’s just crazy.” And I think, really? Crazier than negative interest rates? Crazier than paying banks to keep loanable funds in sterile depository accounts at the fed? Crazier than having the Fed buy up trillions in government debt, remit the interest payments back to treasury, and then count that as revenue to the federal budget? Is it crazier than having hordes of financial market analysts parsing every word uttered by a monetary official, obsessing over the minutes of the latest fed meeting trying to glean clues about what must happen next. It’s almost as if we’ve forgotten how to engage in free enterprise, because we’re waiting for marching orders from a central planning agency. I think we’re the rational ones. They like to brand us as ideologues, but in truth we’re the realists. And that sobering fact is becoming clearer every day as reality continues to whipsaw global markets.
Who is the crazy one, she wonders. If monetary policy, if a currency debate, if interest rates and quantitative easing and the Fed as a whole are going to truly become a major part of the 2016 presidential race, then that is one of the first and most important questions that each speaker at the Summit must answer, and answer well. They’d be greatly served by following Dr. Judy Shelton’s example.
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