10/04/10 Stockholm, Sweden – If Dr. Ron Paul is one of few voices of reason in Congress, then Thomas Hoenig may be the Fed’s Ron Paul. As president of the Federal Reserve Bank of Kansas City and voting member of the Federal Open Market Committee, he’s been the lone vote of dissent against the Fed’s ultra low-interest rates –six times.
Here’s how Bloomberg describes Hoening in a recent profile:
“This is Tom Hoenig’s moment, and it’s a strange one. In Washington, he is the burr in Fed Chairman Bernanke’s saddle: the rogue heartland banker who keeps dissenting alone — for the sixth straight time on Sept. 21 — to protest the Fed’s rock- bottom interest-rate policy. Hoenig warns that the Bernanke majority is setting the country up for an as-yet-unknown asset bubble: the next dot-com or subprime craze. He can’t tell yet where the boom-and-bust will materialize, but he can feel it coming, like a Missouri wheat farmer senses in his bones the storm that’s just over the horizon.”
Yet, even with un-Fed-like views — enough so to serve as a Tea Party speaker in the clip below — he articulates well a few points against ending the Fed in a hurry. Here’s a sample of his reasoning…
“I know many of you are very strong supporters of end the fed, and I respect that, the Congress can end up changing it. But, you better have something else in mind. If you have the gold standard in mind, that’s fine, but it’s not going to end crises. And, remember the populist movement was about ending the gold standard, because it was a very strict requirement on debitors who happened to be in agriculture at the time. So, know what it is you want. And, if you’re gonna end the Fed, and you think you’re going to do it, make sure that what you’re going to end up with isn’t a more centralized institution, located in Washington or on Wall Street.”
Check out the actual video of his talk below, which came to our attention via a Daily bail post on Fed President Thomas Hoenig’s speech to the Tea Party on Bernanke’s QE insanity.
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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Well Rocky from Stockholm, perhaps you have Stockholm syndrome! If this guy is so honest and true than why doesn’t he get an honest and true job (perhaps he could actually become the Missouri wheat farmer). He is just playing the “good cop”. He is the one to make you think that they are not all working together to steal from us. He is the one to frame the point of view of the opposition in a way favorable to his handlers. William Jennings Bryant, who is the “populist” alluded to in the article, was no shill for the central bankers like this guy. Neither is Ron Paul a shill. I remain unimpressed by his words. A real subject of interest would be if a man resigns from his position with the FED and begins talking like this. I hope this note is a splash of cold water in your face to wake you up! Know thine enemy!!!
The problem, as I see it, is that he is trying to make a case for keeping the game going, albeit with differences. Another ‘solution’ which is no solution at all, but another opening for loopholes and corruption that would be obvious to the elites long before it would be to the average American.
As he mentioned, the gold standard is a very strict mistress. The problem with the gold standard is that interest cannot be charged, but indeed, the problem with fiat money is that interest CAN and IS charged with devastating consequences.
That strict mistress means that power is removed from the hands of the corrupt few, and put back into the hands of the people. It does not require the policing that a fiat currency does. Take all the gold and silver available for commerce and divide it among the people for their use and cut out ALL of the middlemen. Then see what happens with the economy… You can be sure that the power and money brokers will do anything to ensure this never happens.
The Fed is an increasingly disgraced and discredited institution, as is the Street and banking in general. There is no fixing that mess. Best to ‘cut our losses’, cut off the elites, and begin again with a reliable and honest source of money.
At best he is the “good cop” as mentioned by John, at worst he is trying to scare people into thinking anything but the status quo will be worse. And, of course he is going to talk down alternatives, away goes the FED and away goes his cushy job because he aint gonna be no wheat farmer.
Give me Adam Smith’s invisible hand of the market. That hand may rock the cradle but the fed is tipping it over.