Comments on: Sad Day For America: H.R. 1207 – Audit the Fed Bill Has Been Gutted http://www.opencurrency.com/blog/2009/10/sad-day-for-america-h-r-1207-audit-the-fed-bill-has-been-gutted/ American Open Currency Standard Blog Mon, 02 Nov 2009 01:45:13 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: R. Jackson http://www.opencurrency.com/blog/2009/10/sad-day-for-america-h-r-1207-audit-the-fed-bill-has-been-gutted/comment-page-1/#comment-13 R. Jackson Sun, 01 Nov 2009 13:40:37 +0000 http://www.opencurrency.com/blog/?p=28#comment-13 The Secretary of the Treasury, a very senior cabinet position, is appointed by the President and meets with the President in the Oval Office weekly. The governors of the Federal Reserve Board are also appointed by the President. Both cabinet officers and Federal Reserve governors are confirmed by the US Senate. There are supposed to be seven governors; politics has purposefully limited this to five throughout the three-year financial crisis period. The Federal Reserve governors are supposed to serve staggered 14-year terms with all seven seats filled. Instead, we have been governed by the present five member politically configured board. The original seven governor construction was designed to insulate them from political pressure for very good reasons. Decades of monetary history throughout the world have disclosed what happens when political influence on a central bank intensifies. The Weimar Republic and Zimbabwe are evidence of the worst inflationary effects of politics. The Great Depression in the US and the nearly two decade deflationary recession in Japan demonstrate that monetary policy is not only inflation-prone. When central banks are under political influence you can get fire or you can get ice. The Secretary of the Treasury, a very senior cabinet position, is appointed by the President and meets with the President in the Oval Office weekly. The governors of the Federal Reserve Board are also appointed by the President. Both cabinet officers and Federal Reserve governors are confirmed by the US Senate. There are supposed to be seven governors; politics has purposefully limited this to five throughout the three-year financial crisis period.

The Federal Reserve governors are supposed to serve staggered 14-year terms with all seven seats filled. Instead, we have been governed by the present five member politically configured board.

The original seven governor construction was designed to insulate them from political pressure for very good reasons. Decades of monetary history throughout the world have disclosed what happens when political influence on a central bank intensifies. The Weimar Republic and Zimbabwe are evidence of the worst inflationary effects of politics. The Great Depression in the US and the nearly two decade deflationary recession in Japan demonstrate that monetary policy is not only inflation-prone. When central banks are under political influence you can get fire or you can get ice.

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