Over the next four weeks, I will discuss what central banks were and what they've become. What central banks have become is completely different from what they originally were. In fact, anyone associated with the development of the Federal Reserve - which was only created in 1913 - would find today's Federal Reserve completely unfathomable.
On February 20, 2004 Ben Bernanke gave one of the most remarkable speeches of his lengthy Fed career; he served at the Fed from 2002-2005 and 2006-2014. He claimed "improvements in monetary policy, though certainly not the only factor, have probably been an important source of the Great Moderation." (1) The Great Moderation was a term economists and central bankers came up with to e
With markets heaving - futures are currently limit down at 5% - there will be widespread calls for the Fed to 'do something.' Lost in this Pavlovian response for Fed succor is the realization that today's chaos is a direct result of the Fed interfering in markets in completely unprecedented ways. Alan Greenspan's term at the Federal Reserve was a watershed in this country's history. Prior to
One of the best scenes in a movie, "Jaws," full of them is the confrontation between the salty Captain Quint, played by Robert Shaw and the PhD oceanographer, Matt Hooper, played by Richard Dreyfuss. The exchange is prompted by a fish - which Hooper had earlier and erroneously dismissed as a 'gaming fish' and not the killer great white shark they were after - biting through a steel piano wire
One of the signature moments of the Federal Reserve's complete ignorance of the enormous housing and credit bubble that was metastasizing under its collective nose was an interview Ben Bernanke gave in July 2005. At the time, people had already started to discuss the possibility of a housing bubble. Indeed, housing, in terms of homeownership, peaked over one year earlier, in April 2004. (See