Larry Summers and the Fed: Advocating Monetary Policy for the People

Oh boy!  The fans of the peoples’ money must be jumping for joy these days!  Who knew that they would have advocates in such high places?

First of all, for those who complain that central banks create enough money to repay the principle, but not enough for the interest…well, if ZIRP for the last five years wasn’t enough to tickle your fancy, the future looks equally bright:

The Fed has tried to goose the economy a little more by promising to keep its key short-term interest rate near zero for years. Last year, it promised to keep ZIRP in place until unemployment fell below 6.5 percent, something it doesn't see happening until at least the middle of 2015. Lately it has started promising to keep rates low for a long time even after unemployment falls below 6.5 percent, a promise Fed Chairman Ben Bernanke repeated in a speech on Wednesday. (Emphasis added.)

All that is left is for the Fed to drop the money directly on main street – perhaps this is Yellen’s calling?

And what about those who advocate for a depreciating currency, a la Wörgl:

Some economists think interest rates should be much, much lower than zero: Maybe negative four percent, before adjusting for inflation.

Central bankers aren't talking about making people pay interest on their own savings. Not yet, anyway. The political outcry over that is easy to imagine. But they could find other, more creative ways to make it painful for you to hold onto cash. Giving money an expiration date or using electronic money in order to help control the flow of it are just a couple of the more creative ideas. (Emphasis added.)

One source of tremendous chuckles for me was regularly hearing the advocates of these schemes of monetary pixie dust accuse Austrians of being part of the system.  Well, I haven’t heard Bernanke or Summers call for an end to the central planning of money via central banks, have you?

But zero interest?  A demurrage currency?  It seems the peddlers of these schemes have friends in high places.

Anyone who advocates for any system other than a free-market in money, credit, currency and banking – regulated via contracts and the market – is an advocate of central planning.  As such, they play right into the hands, or are paid by the hands of those who would control us through the control of money.

Larry Summers and the Federal Reserve; oh, what strange bedfellows for the blowhards that have advocated for these schemes.