Month: July 2021

Zero Hedge/Joseph Carson/7-27-2021

“A ‘hands-off’ policy is a short-term friend to finance until it isn’t, whereas a ‘hands-on’ is a long-term friend as it attempts to limit the scale of the inflation cycle. Greenspan’s “hands-on” policy worked, and early results indicate Powell’s “hands-off” isn’t. How long will it take before investors realize Powell will eventually need to follow Greenspan’s plan?”

USAGOLD note: Such thinking will figure largely within the Biden administration as it contemplates who will chair the Fed come February of next year. The White House will be heavily in favor of the “hands off” approach and will worry about Powell, a Republican, changing course if/when he is reappointed. Lael Brainard, often touted as the most likely alternative, favors the progressive agenda embraced by the Biden White House.

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Mauldin Economics/John Mauldin/7-23-2021

“Chief Jerome Powell himself said so, repeatedly begging Congress to deal with unemployment and business failures more effectively. He admitted there was little else his fire trucks could do but he kept them there anyway in the form of massive quantitative easing and keeping rates at the zero bound. They are still on-scene now. It is my opinion that this has the potential to go down as the greatest policy error in central bank history.”

USAGOLD note: Of course, that is the general course of action that in other places, other times led to currency destruction and runaway inflation. Mauldin offers some advice on what he thinks the Fed should do. “Though to be frank,” he adds, “I have little hope they will.” He likens the direction Jerome Powell has taken to that taken of Fed chairmen Arthur Burns and G. William Miller in the 1970s.

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