Dallas Federal Reserve Doesn’t Relent – Bust Up Too Big To Fail

Richard Fisher, the Dallas Federal Reserve President, was somewhat of a lapdog before this crisis.  In fact, I mocked his generally oblivious nature before this crisis hit.  He was in the ozone.  But, I must say, he has made a reasonably graceful recovery and has been consistently on the side of democracy.  At least as much as someone who is part of the public-private partnership of the Federal Reserve can be.    We need a fully public and accountable Federal Reserve. 

Fisher has been beating the drums of too big to fail for quite a while and isn’t backing down.  Some interesting charts in the Dallas Fed’s recent presentation…. 

Barron’s article and link to the Dallas Fed presentation here.  I know the WSJ properties sometimes have links that only work from Google so if that link doesn’t work, the Fed’s presentation is here.

By the way, make sure you look at the sixth chart.   There was a period after the Civil War’s substantial government spending that hard money advocates put us into what was essentially a forty year depression by crushing the money supply.   There was rampant corruption in that decision.  Gold and silver-backed money is the opposite of democratic money.  There is no historical example of anything closely resembling democratic money using gold or silver.    To the contrary, those who have the gold and the silver always deny it to those who don’t.  Gold is a tool of elites, predation, colonialism and state-based economics.  The post Civil War period has a substantial parallel to today where after substantial wars and frivolous spending, hard money advocates today want to slam the brakes on our money supply.  It would have an equally devastating impact of depression as far as the eye could see.  And, I have written those exact words on here a few times before.  Gold money advocates really are clueless.  I share and appreciate their enthusiasm for reform but they don’t understand money, economics,  democracy, democratic capitalism or democratic economics.   They would make matters worse. 

We need soundness to our money but gold creates an artificial limit on the amount of money available in the economy.  Those limits are decided by who has the gold.   There are so many easy solutions to accomplishing monetary reform.  Gold is not monetary reform.  It takes us back to the days when those who had gold made the rules and that meant enslaving those of us who didn’t have any of it.  By the way, this is not only true of a national currency but also as a form of international trade settlement.   Gold as a form of trade settlement encourages state-based looting on a global scale, corporatism, unsustainable economic dynamics, mercantilism and other forms of corruption.   The United States had all of the gold in the world in 1929 and that was in fact the problem.  Of course, it wasn’t the problem for the elites in our society who had all of the gold.  Just the rest of us poor sonofabitches who suffered death, indignity, loss of employment, endless poverty and living in cardboard shacks.   Gold-based international trade settlement creates massive dislocations and unsolvable problems.  It also would cause endless suffering and possibly even massive waves of death in third world countries.  Gold is not the answer.   It is the problem. 

Of course, the flip side that post Civil War period is from 1983 to 2007 where endless profligacy of economic dunces run amok inflated our way out of everything and that allowed corporations, politicians and elites to hide the effects of what they did to our democracy,  democratic economics, our economy, our public institutions, our pensions, Social Security, economic determinism and on and on.   The day of reckoning will arrive soon enough.  But, it isn’t the Federal Reserve who created the mess we see today as I have noted ad nauseam.  It was politicians.  The Fed, being a creation of the corporate state, simply wallpapered over the corporate-politicial corruption.