My Excellent Adventure at the Federal Reserve Headquarters
Dear reader, I was afforded a most extraordinary experience recently that has given me unique insight into our global financial and political systems. I intend to share my experience with you. However, I caution you, that the information I gleaned from this experience will be disturbing. What you are about to read will forever change your view of banking, politics, economics and money. Read on, if you dare.
Hobnobbing with all the world's leaders
Little did I know as my day started, that by midnight I would find myself inside the Federal Reserve building in Washington D.C., hobnobbing with all the world's political leaders, Central Bankers, assorted luminaries from the financial industry, powerful lobbyists, as well as all the world's Nobel Prize winning economists.
Overcome by 'Irrational Exuberance'
I was in Washington on business recently; well truthfully I was in Washington to appear in court to face charges that related to a New Year's Eve party at the Canadian Embassy that, shall we say, was overcome by 'irrational exuberance'. At the end of the party I was invited by the local police, to return to DC in the summer, to face charges of being drunk and disorderly. In any event I awoke the day of my trial, late in the afternoon, to a beautiful summer day. The police officer who woke me up me was most polite as she explained that I was not allowed to sleep at the foot of the Washington Monument. Clearly she was not familiar with the financial challenges of being a writer. My decision to sleep outdoors was part of my attempt at the frugality that was necessary until royalties started pouring in from my, as yet, underappreciated, undiscovered writing genius.
I arose, dusted myself off, and headed to court to face my 'Judgment Day' when my phone rang. It was none other than Gustavo Laframboise-Pierre, the director of Global Statistical Creation at the European Central Bank [ECB]. My curious connection with a senior member of the ECB management team traced its roots to my time on Wall Street when Gustavo was my principal bookie. His fortunes changed in a most dramatic fashion when a senior member of the ECB placed a staggeringly large and incorrect wager on the outcome of the 2010 World Cup. The only way the debt could be settled was to offer Gustavo a highly paid sinecure at the ECB. My friend and former bookie, Gustavo, thus became the Director of Global Statistical Creation at the ECB, responsible for making up statistics to prove the merits of whatever deranged monetary policy central bankers around the world were instituting.
Thirty days behind bars
"David my friend", Gustavo said breathlessly, "this is your lucky day"! I am not sure I agreed with him as I was probably going to spend the next thirty days behind bars as an apology to the citizens of Washington for my drunken behavior. "David" Gustavo continued, "Tonight is the first annual meeting at the Federal Reserve in which the world's Central Banks spell out their plans for the world for the next 12 months. Every world leader, central banker, financial wizard, economist and major industrialist is required to be there. My date for tonight has had to cancel as her husband has returned early from his fishing trip. You can be my date tonight".
More press coverage than a Royal Wedding
"Gustavo" I responded, "What in the world are you talking about? You make it sound like the Central Bankers are summoning the world's leaders as if they were school children to be admonished or rewarded for their behavior. "Furthermore, Gustavo", I offered, "I have heard nothing of this on the news. This alleged meeting would receive more press coverage than a Royal Wedding".
In Swimsuits: the media will not be able to resist, You Betcha!
"David", he replied, "The Central Bankers are cognizant of the risk of this secret meeting becoming public knowledge. That is why they have made arrangements to divert the public and the media. They have arranged with various media outlets to run back to back marathons of 'Celebrity Rehab', 'Here Comes Honey Boo Boo' and say 'Say Yes to the Dress'. This 'Realityfest' will ensure that 100% of the public are distracted. As if that is not enough, the bankers have arranged for Kim Kardashian, Paris Hilton and Sarah Palin to hold a joint press conference at which time they will, while wearing swimsuits, discuss their views on fashion, politics, and family values. CNN and FOX and every other journalist in the world will be drawn to that press conference like 'flies to honey'. Other than you, there will be no journalists in Washington tonight to report on this meeting. You will have an exclusive. This is your big chance to be famous. Swing by the 'Watergate' at 7 and we will head to the event together."
The word surreal does not even begin to capture what was to follow
Dear reader, it was at this point my 'Excellent Adventure' started to get a little weird. Gustavo's fortuitous call meant that I would be inside the Federal Reserve building shortly, attending the most extraordinary gathering in history. In preparation I drained one my flasks of 'Jack Daniels', and headed to the nearest 'Goodwill' store to purchase a suit for tonight's festivities. I arrived at the Watergate promptly at 7. After enduring Gustavo's derisory comments about my 'previously enjoyed' suit, we climbed into Gustavo's limousine and headed off to the Federal Reserve building for the night's entertainment. Dear reader, the word surreal does not even begin to capture what was to follow.
Central Bankers would be announcing the names of the leaders who would be
allowed to remain in power
As we entered the 'Grand Hall' I was overwhelmed to see so many famous and powerful people. Obama, Merkel, Hollande, Krugman, Rogoff, they were all there. There were hundreds of powerful leaders crowded in the foyer waiting breathlessly for the Central Bankers to finish their meeting in the boardroom. The agenda I had been handed indicated that tonight the Central Bankers would be announcing the names of the leaders who would be allowed to remain in power for the next 12 months. They would tell all the attendees what kind of food retirees would be allowed to eat this year [food for dogs or food for humans]. They would be detailing the demographics of who would be allowed to purchase a house and who would be allowed to remain in a house purchased and mortgaged in previous years. The Agenda also indicated that they would announce the fiscal policies and budgets for each of the G-20 nation.
A nod and a wink
Dear reader, before you reject that the notion that Central Bankers had in their power, the ability to make and enforce such grandiose edicts, ask yourself this? Who controls the governments of Greece, Cyprus, Ireland, Italy, and Portugal? Who has the ability, with a few well chosen words to increase or decrease the investment income of retirees and determine whether they can afford to shop for their sustenance at a Piggly Wiggly or a Petsmart? Who controls the interest rate on the world's mortgages and has the ability with one press conference to either open the door to home ownership for millions of people or force millions of people to give the keys to their house back to the bank? One interest rate announcement has the ability to do so much damage to an economy that all incumbent politicians would find themselves swept up in a wave of 'Throw the Bums Out' protest. Who, with a nod and a wink, and some freshly printed money can decide whether a government can increase their debt and deficit in order to afford the next and greatest trillion dollar weapons system that will be used to defend their crumbling infrastructure, declining educational institutions and rapidly deteriorating ecosystems? The answer, dear reader, sadly, is that our Central Bankers control all of these decisions and much, much more.
On with the show this is it!
No more nursing and rehearsing our parts, on with the show this it! Suddenly the doors to the conference room opened, Ben Bernanke and Mario Draghi stepped out. Initially there was silence in the room as they walked to the podium. Mr. Draghi, of course walked the obligatory three paces behind Mr. Bernanke.
Bring it on
Then some side doors opened and 100 cheerleaders with their pom-poms made out of shredded Dollar bills and Euro notes flooded the room. They guided the audience in a raucous cheer for Mr. Bernanke and Mr. Draghi. Sadly the cheerleaders were not the stunningly attractive, athletic and talented stereotypical cheerleaders made famous in the movie 'Bring it on'. The cheerleaders were actually members of the financial industry who had volunteered to perform their routine at this event. Gustavo and I were beside President Obama and Russia's leader Vladimir Putin. Although they looked a little awkward at first they were clearly getting into the spirit of things.
The National Anthem of Central Bankers
Mr. Bernanke stepped up to the microphone and intoned. "Welcome to tonight's meeting. We will start by singing the national anthem of Central Banks". As music stated blaring over the speakers everyone put their hand over their wallet and started to sing ABBA's smash hit, 'Money, Money, it's a Rich Mans World'. Apparently the song had been adopted by the Central Bankers as their National Anthem. In any event everyone seemed to know the words and I was almost deafened by Presidents Putin, Hollande and Obama's full throated rendition of the song.
You have got to be kidding me?
As Mr. Bernanke started his speech with the usual blather I noticed that everyone in the audience had their Blackberries out poised and ready to hit speed-dial. I asked Gustavo why everyone was clutching their Blackberry in such a manic fashion. Gustavo whispered, "Everyone wants to be able to call their broker in case Bernanke gave some indication on what musings about the direction of interest rates he intended to offer the markets over the next month. Fortunes could be made with this information". I looked at Gustavo, 'You are kidding me, right? He just winked.
'When Central Bankers want your opinion they will give it to you'
I spied a door that indicated that it was the location of the Federal Reserve's Accounting and Investment department. I needed some fresh air and a 'wee dram'. I decided to take a peek inside the centre of the financial universe. Dear reader I was not shirking my duty as a journalist by exiting the room in the middle of Mr. Bernanke's speech. As an experienced journalist I knew that after the press conference I would be handed a 'Press Kit' that would include a summary of what was said. In addition it would include the spontaneous opinions and analysis I permitted to express on what was said. The press kit saved journalists a great deal of time. As the saying goes, 'When Central Bankers want your opinion they will give it to you'.
His name was Vincent
I opened the door to the Accounting and Investment department expecting to see a huge room filled with hundreds of screens wired to massive super computers. Imagine my absolute shock when all is saw I was a small room with some dusty boxes. There was a gentleman at a desk furiously pulling the crank on an antique adding machine. The name on his desk plate indicated that his name was Vincent. He looked up slowly; he appeared to be just shy of 110 years old. "May I help you?" he offered. "Oh sorry to bother you Vincent, I just needed some space. It is very crowded in the other room" I replied. "No problem" he said, as he squinted at my name tag. "David, I don't get a lot of visitors here". "Vincent", I asked, "if I may be so bold, I cannot believe this is all there is to the Federal Reserve's Accounting and Investment department." He responded, "David, there is not really an accounting and investment department here anymore. After Roosevelt in 1933 and Nixon in 1971 gave the Gold Standard its collective 'Coup de Grace' we here in the Accounting and Investment Department realized that it was not necessary to keep track of money any more. Governments around the world were finally free to just print whatever amounts of money they needed. Why bother to keep track? As long as the world believes the phrase 'Full Faith and Credit of the U.S. government' we can print as much money as we want."
Statistics that would baffle and confuse even the most sophisticated
Vincent continued, "The hard part has always been making up numbers to satisfy those in the public like that tedious and irksome man Ron Paul, who actually think bookkeeping is necessary for the Federal Reserve. Fortunately our subsidiary in Europe, the ECB, hired a brilliant statistician, Gustavo Laframboise-Pierre, who now produces prodigious amounts of statistics that would baffle and confuse even the most sophisticated mathematician or accountant. He is amazing and has made my job so much easier. All I have to do is balance the Federal Reserve's books for the time period leading up to 1933 and then I can retire. I should be ready to start my retirement in about 10 years."
I stood between Russia's Vladimir Putin and David Cameron
I offered Vincent a sip from my flask which he gladly accepted. I thanked him for his time, wished him a happy retirement and returned to the Grand Hall to listen to Mr. Bernanke's closing remarks. I stood between Russia's Vladimir Putin and David Cameron, Britain's Prime Minister, and listened to Mr. Bernanke. I reflected on what Vincent had said. There was clearly no point writing an article about my experience tonight as no one would believe me. Furthermore for at least the next two months, the media's attention was going to be focused like a laser to provide the world with 'wall to wall', 24/7, analysis of the aforementioned Kardashian/Hilton/Palin press conference. Tonight's event would not merit even a mention by Anderson Cooper.
Fear and Loathing
As Mr. Bernanke wrapped up his presentation I could not help mentioning one undeniable fact about Mr. Bernanke's and Mr. Draghi's speeches. I am not sure if I mentioned this before but both Mr. Draghi and Mr. Bernanke, except for their black knee socks were completely naked. I snickered as I casually pointed this out to Vladimir and Gustavo. I indicated that I thought it would be quite amusing to bring this to the attention of the audience. They looked at me with fear and loathing. Gustavo, the traitorous swine, surreptitiously kneeled behind me on his hands and knees. Then Vladimir Putin and David Cameron pushed me hard and made me fall over backwards, over Gustavo's body. Their excellent execution of this classic schoolyard bullying technique left me dazed and confused as I lay on the floor.
The Emperor has no clothes
Before I could gather my thoughts, Germany's leader, Angela Merkel, David Cameron, President Obama and Canada's Prime Minister Stephen Harper grabbed my limbs and carried me struggling, to the exit. I looked into their angry faces as they hauled me toward the exit. It occurred to me that perhaps, the Central Bankers, and the members of their management team, the worlds politicians, were not quite ready for someone to say that 'The Emperor has no clothes' . They handed me into the care of DCs finest who quickly determined that an impatient judge had issued a bench warrant for my arrest based on my non-appearance at court earlier in the day.
A 'Guest of the State'
I recognized the kind officer who had given me my 'wake-up call' this afternoon at the Washington Monument. I smiled at her and said, "Well, at least I will be sleeping indoors tonight". I was to be a 'Guest of the State' again. The officer seemed somewhat sympathetic to my plight so I continued, "Would you please contact my good friend Gustavo Laframboise-Pierre and ask him if he would be so kind as to arrange for my bail". My excellent adventure was over.