Forbes reports that Treasury Secretary Janet Yellen’s net worth is about $2o million. That’s a lot of money for a college professor and occasional bureaucrat. According to Forbes, Yellen “built up her small fortune over time, through years in academia and government, cashing in most clearly after she left her position as Fed chair in 2018.”
Speaking fees from Google, Goldman Sachs, Citi, and Barclays during the lockdown added an estimated $7.2 million to her portfolio.
Well. Those of us who have heard her speak are scratching our heads.
Yellen is not the only one cashing in at the Fed. A couple of Fed bank presidents suddenly resigned last month. Questions are being asked about the trading activities of still others. Even Chairman Jerome Powell can’t duck the stench. According to Wall Street on Parade, “Powell had sold between $1 million and $5 million of the Vanguard Total Stock Market Index Fund on October 1, 2020, the same day that Powell had been on four phone calls with Treasury Secretary Steve Mnuchin, who was coordinating the White House response to the financial crisis resulting from the pandemic.”
Have you ever wondered why Wall Street hangs on every word uttered by Fed officials like Yellen? They dot plot their votes, eagerly await the release of the old minutes of their Fed meetings, and pay them well for every word and inside tip they provide.
Should the resilience of the American economy depend on the productivity of the people, their innovation, their savings and capital formation, and their well-being?
Or should it depend on the deliberations and machinations of a bunch of mostly nameless, faceless bureaucrats who stovepipe billions to one favored constituency after another? The blind-leading-the-blind decisions of a board of unelected professors who have boomed and busted the economy over and over again?
We might as well ask if interest rates shouldn’t reflect the real conditions of the supply and demand for capital – so that no one is misled by artificial rates designed to help some beneficiaries at the expense of others not as well-positioned.
You see where we’re going with this. Shouldn’t money be something of value, something liquid that the entire world prizes? Or should it be something of no enduring value, printed digitally by bureaucrats? Which of those will inspire more stability and long-term confidence?
Of course, the answer is available for all to see in the history of money. Because all unbacked, paper money currencies eventually fold, while gold and silver have endured as valued monetary assets for millennia.
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