The name is Dr. Judy Shelton. She's a long-time advocate for what I consider sane monetary policy, and "real money" - which is to say money that can't be created in any quantity whenever desired. She once called the Federal Reserve Bank "almost a rogue agency" and questioned whether it could be trusted in having oversight of the dollar.
What brings her name back? To be 100% open, I've been pondering writing on some of the economic mess that's in the back drop for all the politics sucking up headlines all the the time. I was looking at some of my previous pondering on going back to something like a gold standard that can't just be revalued at any time the bankers want. While looking around, headlines showed up saying Secretary of the Treasury Scott Bessent had hired Dr. Shelton as a counselor to the Secretary. That was back on October 9th, so recent news that I was unaware of.
WASHINGTON— Secretary of the Treasury Scott Bessent announced today a key senior appointment at the U.S. Department of the Treasury. Dr. Judy Shelton will serve as a Counselor in the Office of the Secretary.
Shelton is an economist and author specializing in international financial and currency issues. She previously served as U.S. Director of the European Bank for Reconstruction and Development and as Chairman of the National Endowment for Democracy. She has testified numerous times before Congress as an expert witness on international financial relations and has consulted with national security officials on global economic developments.
At Treasury, Shelton will advise the Secretary on currency policy, with a particular focus on evaluating financial conditions in China.
Dr. Shelton has been involved politics as far back as I can read, working on the campaigns of Bob Dole ('96), Trump (both campaigns) and Dr. Ben Carson's ('16). She has advocated that the US Treasury should sell not just "futures" to pay some return after some number of years, but sell Treasury Inflation Protected Securities (TIPS) which would be redeemable in either dollars or gold, effectively tying the two together without a formal gold standard.
One of the things I bitch about pretty regularly is that we've been off a real money system for so long - really since the 1913 creation of the Fed, with some historical events along the way that made things worse - for so long that people don't think at their gut level that the prices associated with things like the assessed value of their house, or even their pay, go up partly to cover the "constant benign inflation" the Fed pushes on us. The Fed claims they're aiming for 2 to 3% but rarely achieve that. They create that inflation by printing more money, more money drives prices of everything up. If you work providing "goods or services", you have to pay more for your raw materials to make your product and you have to pay more to the people that turn things into that product. If you're that worker, you expect your pay to go up at least every year. If there's no Central Bank driven inflation, you probably don't get that automatically. The trade being that the cost of everything hasn't gone up, either.
Dr. Shelton on a Fox Business News video dated September 21, 2022. Image credit: screen capture from the video. Interview with Larry Kudlow.
Almost a rogue agency?
ReplyDeleteThe Dow/Gold ratio peaked in 1999 and has fallen of a cliff since then. If you measure the Dow in gold rather than dollars, we have been in a bear market for 27 years. Yet most who sell stocks are still paying capital gains taxes. The 1999 peak coincided with the blow up of mortgages when houses were selling with zero down and no job held by mortgage holder. Politicians, banks, and buyers went insane. indyjones
ReplyDeleteThanks. That's exactly the kind of thing I wish was better known and talked about.
DeleteI forget where I first read this, but it was probably around that time (1999) that someone said money didn't have to be based on gold or silver, just something that couldn't be produced in practically unlimited quantities. The Yap Island people used big rocks for their standard and they never had inflation.
Another off-topic comment, a link to an outstanding video about the dawning Cis-Lunar economy:
ReplyDeletehttps://www.youtube.com/watch?v=kdpOdSMzXTA
Titled "The Strategic Importance of the Cis-Lunar Economy". Very well done, and absolutely riveting. I'm trying to get back into writing my old alternate history novel about using John Powell's Airships to Orbit concept to create a space faring and living society. This video will be very helpful if and when I resume writing.
One of the elements of proper currency is rarity, a limited supply. Gold is the most well known example. This is not true of paper and ink, let alone digital bits.
ReplyDeleteLong-time lurker; please forgive the intrusion. You may be missing some information. To begin with, the FED is practically irrelevant to contemporary finance. Yes, really.
ReplyDeleteThe great bulk of the financial system has moved "offshore;" that is, beyond the reach of ANY central bank. These are international financial transactions (roughly called "the eurodollar system") that occur every day, in vast quantity. We're talking bonds, derivatives, currency trades -- all of it. These transactions dwarf in amount and number ANYTHING under the control of the central banks.
This lack of control by central bank policy is most starkly evident when the central banks (FED, Bank of Japan, etc.) "do" something, and it either has no effect, or the opposite of what is hoped/claimed.
For a quick introduction, you might want to read Jeffrey Snider's article (written in 2016), "In Financial Terms, Bank Reserves Are Arpanet."
"JohnK"
Thanks, JohnK.
DeleteWell, my point wasn't "it's the Fed" and I didn't want to get too deeply into that aspect. It's hard to avoid mentioning that, but my point was that it was that having this fiat currency and not real money has bad effects throughout the economy, so much so that people think it's perfectly normal and "has always been this way". For example, people expect their houses to be more valuable every year, and to be making more money every year, and it's that mythical "constant benign inflation" that's responsible.
In both the case of your house or your salary, why should they be more valuable every year? Houses are easier to notice because they deteriorate over the years and routine maintenance is something all homeowners know, while in many jobs you don't necessarily contribute more value to the company every year, yet everyone seems to expect they should earn more every year.
The problem with that 2% inflation policy is that the amount of money being added to the supply gets bigger every year and they need to increase the number of dollars (euros, yen, whatever) every year. In plain old math, the number "printed" goes toward infinity.
The main effect of 'the financial system has moved "offshore;" ' is that the economic collapse changes from just one nation (us) to the entire world. Does anyone think that sounds like a good thing? I mean besides the moron college kids who think communism sounds good.
It turned out the Wizard of Oz didn't really control all that much. Imaginary wealth is still imaginary, and pretending otherwise by shifting large numbers around is still pretend.
DeleteThat name is just Not coming to me. He's a Fed Reserve supporter.
ReplyDeleteThe quote is from the President who who cut ties with Money and relegated us to fiat currency. Wuzzat Nixon?
Dr. asked if I had trouble with my memory.
I asked, How would I Know?
So, any corrections will be appreciated
Yeah, it was Nixon who officially got us off the gold standard, but he was sort of being pushed into it by the results of everything started after WWII. Basically, we had lots of outstanding debt that our currency said was redeemable for gold, and France along with other countries started demanding payment in gold. By that I mean I don't really know if Nixon was "part of the problem" or a victim of the problem.
DeleteHe was part of it but the impetus came from Soros exploiting price discrepancies between European stocks and their corresponding American Depository Receipts. This "worked" because he could buy European debt, redeeming it at $35 per ounce and pocketing the price difference. By Nixon removing us from the gold standard, he shut the "Gold Window" which Soros and other countries were depending on.
DeleteUnfortunately, removing us from Gold meant there was no currency which wasn't 'fait'.
bring in a little Sowell and you've got me hooked
ReplyDeleteAbout 10 minutes ago, I left the comment "Oooo! My favorite!" but didn't click to use this account. My bad. I thought I did, I just didn't read it. So I started over.
DeleteI've been having tons of troubles since some link loaded malware onto this machine and I had to reinstall Firefox. Nine million things about the ways everything works are far more annoying now.
I've got a guy (part of a chain) who washes and dries my machine four times a year (even with Adgard). when things get really hairy, I switch over to Yandex or Comet as an interim measure
ReplyDeleteExcellent topic. I received a personal bit of forced education on money matters about 2008-2010 when a divorce/robbery forced the sale of my home. Not the best timing. I'd spent years struggling in a giant hamster wheel of life and let bad things sneak up on me. No one to blame but myself.
ReplyDeleteFiat currency with few controls is slowly killing the world. Maybe even gaining momentum toward a cliff.
I read somewhere, can't remember who or where now, how lots of employees never get a real raise because merit is lost in the inflation noise.
"Fiat currency with few controls is slowly killing the world. Maybe even gaining momentum toward a cliff."
DeleteBingo!
"I read somewhere, can't remember who or where now, how lots of employees never get a real raise because merit is lost in the inflation noise. "
And measured against something real, like gold, silver, or (dare I say) real estate, they might not get any raise at all.