Saturday, January 30, 2010



* Scott Sumner discusses the Fed's hints that they will drop the "federal funds rate" as their target variable, and instead will use the interest rate on excess reserves. If you can't stomach the wonkish stuff, just scroll down to the end where Sumner explains that beyond the jargon, this transition would transfer power from regional Fed banks to DC. Hmmm. BTW, if you really parse their trial balloon statements, it seems that maybe what the Fed gurus are really saying is that they will still be targeting the fed funds rate, because it will trade at some spread relative to the interest rate on reserves. So having put 5 minutes of thought into this, I have to side with Robert Wenzel who says this is a mere codification of what the Fed has been doing already, rather than a stunning change in policy as Sumner argues.

* I haven't had time to read this carefully, but more on possible government moves to tap into your retirement accounts.

* Chip Knappenberger has an uncharacteristically harsh critique of the IPCC. What I mean is, Chip is usually very moderate in his claims, but he lets loose in this piece describing (apparently) shocking lapses in the IPCC's official procedures to codify the "scientific consensus" on various points. Chip is actually a published climate scientist so he is not a mere right-wing talking head.

* Doug French describes Rothbard in class.

Re: the Holland article at LRC. I get the potential government strategy but I have to wonder at Holland's advice to transfer wealth to "hard currencies like the euro, the Swiss franc." Hard currencies??
Have you heard Russ Roberts' recent podcast with Michael Belongia on the Fed? He wants to "reform" it, but in the first section he described how Greenspan on many occasions made more or less surreptitious changes in the Fed funds rate despite the contrary consensus of the FOMC. Sounds like the aggregation of power to the Fed Chairman is already a fait accompli.

Russ Roberts is more skeptical, and at one point suggests the Fed be eliminated in favor of free banking.

His previous podcast by Thomas Rustici on the great depression is also interesting, as he attempts to reinstate the significance of the Smoot-Hawley tarriff as a major contributor to the great depression, but along the way points out that banking failures, before and since the Fed, were, at the root, caused by Governmental interference with Free Banking.
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