Government Promotions And Failures

By: Bob Hoye | Mon, Mar 30, 2009
Print Email

"Bankers to get keys to the kingdom"

"Senior policymakers from the Group of 20 nations, led by Washington, are likely to agree this week to give their central bankers more power to ensure there's no return of the type of credit crisis that has rocked the global financial system.

That is no surprise, experts say, because central banks are endowed with the skill and know-how to detect asset bubbles and act accordingly. And for the most part, their role in stabilizing the current global crisis has been applauded."

- Financial Post, March 30, 2009

"The truth is that Fed governors, together with their crack staff of Ph.D economists and market analysts, are as close to an economic dream team as we are ever likely to see."

- Gregory Mankiw, Harvard economist and textbook author,
New York Times, December 23, 2007

In the US, there have been three experiments in central banking. The charter of the First Bank of the United States expired in 1811.

On The 1819 Financial Crash

The failure of the Second Bank of the United States occurred with the crash in the fall of 1819.

Essentially newspapers and congress were more responsible than now and asked how would society benefit by bailing out "those who failed from an ignorance of their business, and the want of prudence and economy"?

The New-York Commercial Advertiser lampooned:

There is a cause, we needs must own,
Why much distress and want are known:
Extravagance - our country's bane,
Is spread o'er city, town, and plain:
To dress, to visit, and to play,
To get in debt, and run away,
Are common vices of the day.

Then on January 1, 1820, the New-York Evening Post published:

Old "Uncle Sam," in chasing bubbles,
Has jump'd into a pack of troubles,
Troubles, 'tis said, which sorely vex him,
And which 'tis feared will much perplex him.

That the third US central bank is a failure of promises has yet to be widely accepted, but when it is, we hope it inspires some equally appropriate wit.

 


 

Bob Hoye

Author: Bob Hoye

Bob Hoye
Institutional Advisors

Bob Hoye

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.

Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

Copyright © 2003-2014 Bob Hoye

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/