Hoenig criticizes Fed, Fed attempts to silence critics

[hugolp]

http://blog.mises.org/17707/hoenig-c...lence-critics/

As his retirement date approchaes, Kansas City Fed President Tom Hoenig has become increasingly critical of the Federal Reserve, the big banks, and quantitative easing. His recent comments on a trip to Denver included this:

“Over a decade we’ve used monetary policy as an instrument to solve all problems,” Hoenig, who will step down in three months, told the audience at the Denver Association of Business Economists breakfast. “We know where that’s gotten us.”
Hoenig apparently forgot that The Fed prevented a second depression and that we’re in a glorious recovery.

Meanwhile, on a totally and utterly unrelated note, CNBC reports that “New Rules Put Clamp on Chatty Fed Officials” and that the Fed has grown weary of Fed officials who criticize the central bank’s policies.

“To the fullest extent possible, Committee participants will refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm, or organization who could profit financially from acquiring that information,” the Fed said in a statement.

Such a statement is so broad as to basically muzzle any Fed official from expressing personal views to anyone who is particularly interested in Fed policy.

The Fed no doubt misses the good ol’ days when Alan Greenspan spake and no one dared contradict The Maestro. Now that no one cares what the Maestro thinks while Bernanke openly admits he doesn’t know what he’s doing, it’s apparently time for some obedient silence from Fed officials. Hoenig couldn’t care less given his retirement, but one should probably expect even less diversity of opinion coming from the FOMC and other organs of the central bank in the future.

[hazek]

The most important thing to remember is that each of these people who "criticize" the FED want to at the same time also pretend it is them that really understands the situation and have the real central solution which of course is impossible. No single man on the whole planet can understand what exactly must be done to solve our problem, the only thing that anyone can really know is who can solve the problem and the answer is the free market without the FED meddling.

[Bossobass]

“To the fullest extent possible, Committee participants will refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm, or organization who could profit financially from acquiring that information,” the Fed said in a statement.

Yes, by all means, let's keep the obscene profits from insider information in house.

The FED:

"No, gold isn't money".

Information about monetary policy is money, so STFU.

Also, no one dared contradict... save Ron Paul. Mandatory reading:

The Ron Paul/Alan Greenspan
Congressional Exchanges

http://www.usagold.com/gildedopinion...span-gold.html

Bosso

[hugolp]

Yes, by all means, let's keep the obscene profits from insider information in house.

Or for the after party of the conferences...

[evilfunnystuff]

bump

[-C-]

The most important thing to remember is that each of these people who "criticize" the FED want to at the same time also pretend it is them that really understands the situation and have the real central solution which of course is impossible. No single man on the whole planet can understand what exactly must be done to solve our problem, the only thing that anyone can really know is who can solve the problem and the answer is the free market without the FED meddling.

He actually is pushing for the reinstatement of the Glass-Steagall Act. Which is the most sane thing that come from anyone in the ranks of the fed in...i dunno...it's entire existence?

[hazek]

I honestly didn't read what his proposed solution was because I assumed I'm always right with the above quoted post. And even if he did propose something semi sensible it's still a plan of one man and therefor highly unlikely the best plan.. My point was the plan needs to come from a sound legal foundation and the market place.

[hugolp]

He actually is pushing for the reinstatement of the Glass-Steagall Act. Which is the most sane thing that come from anyone in the ranks of the fed in...i dunno...it's entire existence?

We've discussed this before here. If Glass-Steagal Act would have not been repealed the crisis would have been even worse. Glass-Steagal Act considered mortgages a safe investment and would not have allowed commercial banks to diversify into other assets thus forcing them more into mortgages. It has already been a disaster as it is, imagine if Glass-Steagal was still in place. It would have been even a bigger masacre.

[-C-]

We've discussed this before here. If Glass-Steagal Act would have not been repealed the crisis would have been even worse. Glass-Steagal Act considered mortgages a safe investment and would not have allowed commercial banks to diversify into other assets thus forcing them more into mortgages. It has already been a disaster as it is, imagine if Glass-Steagal was still in place. It would have been even a bigger masacre.

This is entirely incompetent and foolish. Do you understand that they would not be able, by law, to trade on those proprietary accounts? Apparently not, or you would have realized your mortgage disaster claim under Glass-Steagall is false. If you can't participate in speculation, by law, how can you turn 1000 mortgages into a security and begin trading that security? Furthermore, how could they underwrite them? Write swaps on them? You can't. So you're absolutely wrong. If it wasn't repealed non of these investment banks would be systemic to the commercial banking system which exists in the FDIC. Thus, no bailout or "massive mortgage disaster" that you speak of.

[hugolp]

This is entirely incompetent and foolish. Do you understand that they would not be able, by law, to trade on those proprietary accounts? Apparently not, or you would have realized your mortgage disaster claim under Glass-Steagall is false. If you can't participate in speculation, by law, how can you turn 1000 mortgages into a security and begin trading that security? Furthermore, how could they underwrite them? Write swaps on them? You can't. So you're absolutely wrong. If it wasn't repealed non of these investment banks would be systemic to the commercial banking system which exists in the FDIC. Thus, no bailout or "massive mortgage disaster" that you speak of.

The only thing with a bit of sense that you have said is that the investment banks would not have become "Too Big To Fail". The problem with that is that in reality the investment banks were rescued as well, so your stament is false.

[-C-]

The only thing with a bit of sense that you have said is that the investment banks would not have become "Too Big To Fail". The problem with that is that in reality the investment banks were rescued as well, so your stament is false.

Thats all you have? After I just explained to you that the retarded financial instruments used to cause the problem, wouldn't be allowed to exist within the commercial system? I mean sure, a law is worthless if you don't enforce it, regarding the rescue of investment banks. But by that argument, so is the Constitution, worthless, unless enforced.