Parmenides - agreed. If it was up to me, I'd crank the Fed funds rate to 7 or 8%. Maybe more, depending on economic conditions. Level with the American people that things will get tough for a while. But it's necessary to ring out all the excess from the system, and to destroy Lagarde & other foreign central bankers, plus team Biden.
I've been in these Austrian circles since 2009. I've slowly come to realize we have a strong tendency to overreact in our expectation of how fragile and dumb the system is - we do see the worst rising to the top, especially in news headlines, and it keeps us depressed. Relative to the rest of the world, and history, America still has a tremendous amount of freedom intact and the economic power that comes with that. All it takes is some adults in the room, some "America-first" forces to push back against the excesses of the crazed lefty/communist/globalist/whatevers to potentially buy us a lot of time.
Luongo's work has taken awhile to digest and is still an adjustment for me but it does now seem the most plausible and even better, it gives us hope to see things are not always doomed to get worse. I often wonder what Robert Wenzel would have thought of this - one of the last people I followed who really seemed to have his finger on the pulse of the economy. I'd like to see more engagement of senior folks affiliated with the Mises Institute with these ideas as well - geopolitics is a complex rabbit trail for some of them I'm sure but what Luongo says about SOFR and such I just don't see anyone else talking about yet.
Thanks, Matthew. Yes, I've been there. Once you awaken to the fact that the monetary and political systems are not in the little guy's interests, there's a tendency to go ultra dark (take the "black pill" so to speak).
But then, if you trudge on and keep an open mind, you realize that as Americans, there's still a lot to be thankful for. And although we may want maximum liberty right now, we must face reality: Incremental steps towards greater freedom are better than nothing.
I too followed Robert Wenzel for about a decade. I worked for him as a research assistant (my side hustle) from 2016 until his death in 2021. I think and hope that Bob would approve of this piece.
I also hope that there's more circulation of these contrarian Fed ideas among Austrolibertarians. In the run up to the 2024 US Presidential race, Powell will face an angry gauntlet of progressives, conservatives and libertarians.
Please help spread the word that Powell is in our corner. More people need to be in his.
I remember seeing your name in some of his content!
I also want maximum liberty now, but there is no contradiction between my radical Rothbardian libertarianism and me rooting for the worse tyrant to fail: the Davos crowd. And that means rooting for Powell - even though I don't think his position should exist, as long as it does, it should try to restore some sanity as he is starting to do. I'm seeing this view seeping deeper into our circles. Several weeks ago Tho Bishop mentioned it on Radio Rothbard; Tom Woods of course interviewed Luongo a few months ago... hopefully more engagement is coming soon.
Matthew - the "aha" moment that I had in October 2022, when I was convinced that Luongo's thesis was right, was nearly as powerful as me taking the libertarian red pill back in the early 2010s.
You're exactly right. There's no contradiction here. As you probably know, Rothbard advocated working within the existing system to push forward liberty. He voted. He supported construction businesses taking government contracts.
We're facing a long haul toward a Rothbardian society. I'll take my wins where we can get them.
Glad to have you onboard. And I hope others in the Austrolibertarian, conservative and the dwindling, self-proclaimed "classic liberal" circles can get onboard, too.
This is a nice article. I saw it the same way last summer. Powell's language changed overnight when he was confirmed. I was happy to see it. I really hope you're right that the wealthy and banks will start investing their billions or trillions of dollars in real projects rather than wasting it on yet another start-up technology company.
JO - thanks. You were ahead of me on the new way of thinking about the Fed. Like I mentioned, I started questioning things in the summer of 2022. But I didn't fully accept that things were different until the fall. As for the shift in capital: I don't think it's a coincidence that Silicon Valley Bank collapsed, but First Republic Bank was backstopped by the NYC investment banks.
Very nice piece. It should be noted that this is possible because Trump dropped our corporate tax rate from the highest in the world(39%) to 21%, dropped 10s of thousands of regulations, and implemented first-point-of-sale-in-Asia tariffs. Along with unleashing American energy development(That has since been destroyed).
I work at a very profitable American OEM designing and manufacturing durable goods and we are on backorder across the board and it is not all supply-chain issues. We are moving Asia made products back here with very low cost increases. Keep it up, Jay!
Yes, I can't read Williams that well but I agree a change at NY fed is significant. Brainerd leaving too. I believe there were no dissenters for 25bps. Shocker.
Tp100 - also consider what transpired with John Williams. Williams is the architect of the Secure Overnight Financing Rate (SOFR), the debt financing standard that replaces LIBOR on June 30, 2023. US debt indexed to SOFR means that when European banks "catch a cold" so to speak, the fallout won't affect US banks.
In 2018, John Williams moved from the President of the San Francisco Fed the President of the NY Fed - the one with the trading desk and that gives him a permanent spot on the Federal Open Market Committee (FOMC).
America-firster Trump gave bankers the opportunity to make big moves.
It doesn't matter who heads the Fed at this point. Contrary to an overwhelmingly popular academic notion the Fed doesn't manage the economy it distorts it by distorting the most important set of prices in an economy; rates of interest. With short rates now having been pushed to the ludicrous, and terminal, nominal nil level the multi decade avoid hangovers stay drunk routine is over. We can now anticipate four decades of monetary, and fiscal, distortion being wrung from the system via accelerating currency debasement and consequent general price inflation; probably over a decade or more (the only alternative is deflationary collapse). This is not a cycle you can hold through. Tangible assets offer refuge for those who act in a timely manner.
any writer on economy who doesn't point out that SPENDING not INTEREST rates is what controls an economy is either a useful idiot or a lying tool....pay attention to how every billion and trillion added to the budget keeps the wallstreet inflation engine running and the rate increases only ensure that americans will be taxed to death by the owners of deficit debt and who is the biggest owner of debt ? not japan, not china....it is the fed reserve itself....wake up fools !
Powell, Brainard, Yellen, Dimon and Fraser are members of the liberal-fascist Council on Foreign Relations (CFR) which has dominated US policy since WW2.
David Rubenstein, co-founder of the Carlyle Group, is the CFR chairman. Powell is a former Carlyle partner. Larry Fink of BlackRock, which "partners" with the Fed, is a CFR director. Fink and Rubenstein are also trustees at the Davos WEF.
Liberal-fascism: rule by a corporatist oligarchy, behind a false front of "liberal democracy".
I have one question that no one wants to answer. We all know the Fed is a privately owned entity that controls the world’s reserve currency but we don’t know who owns it. So who owns the Fed? Answer that question and you will understand who exactly controls the American Empire and what the economic agenda is.
Assume Powell is a good guy. If Powell allows CBDC to exist at all, then we are going to be slaves. The only point is when. Powell won't be there forever. The next person in the chair or the one after that, will then be free to enslave us with the non-currency, fully trackable, fully programmable CBDC tokens.
Ghost Rider - maybe. But the powers that be (Davos, commies within the US government, etc.) want you to be hopeless. I'm not.
About 15-20% of us said no to all their crap over the last 3 years. You could view this two ways: 1) There's no way to fight against these overwhelming numbers, or 2) There's a hardcore base that won't budge; and as long as this base exists, the squishy middle - the 50%, 60%, maybe even 80% of people - will realize that the pushback against the globalist trash is legitimate, and they'll want to join the winning side.
I think so, too. It's not growing as fast as I'd like.
But when more revelations of the malice of the last three years comes to light, we might see exponential adoption. I'm looking forward to more people on the side of liberty.
Powell stood by and helped inflation run wild by increasing the money supply and supporting massive government deficits while the supply line was being destroyed by governments and unemployment was rising due to the actions of various state and local governments. Then he decides to destroy the economy while not speaking out about the still increasing massive deficits and causing unemployment to increase. He along with the idiot Yellen who said deficits have no effect on inflation need to be tarred and feather and run out of town. The Fed has created every boom and busy including the Great Depression since its creation. Both Powell and Yellen are perfect examples of the Peter Principal are are to be derided instead of being praised.
Powell needs to get the Fed Funds rate to 6% to break the Hair Sniffer's spine. He is headed nicely in that direction.
As for the comment Powell is a lawyer-- better a lawyer who knows currency than a weJ who works for the hair sniffer
Parmenides - agreed. If it was up to me, I'd crank the Fed funds rate to 7 or 8%. Maybe more, depending on economic conditions. Level with the American people that things will get tough for a while. But it's necessary to ring out all the excess from the system, and to destroy Lagarde & other foreign central bankers, plus team Biden.
Great post Harrison. Captures the essence of Tom’s major hypothesis and distills it into an easy to read, accessible piece. Well done.
Thanks, Christopher. After you offered the thesis on that email thread, it still took me 3.5 months to come around.
I've been in these Austrian circles since 2009. I've slowly come to realize we have a strong tendency to overreact in our expectation of how fragile and dumb the system is - we do see the worst rising to the top, especially in news headlines, and it keeps us depressed. Relative to the rest of the world, and history, America still has a tremendous amount of freedom intact and the economic power that comes with that. All it takes is some adults in the room, some "America-first" forces to push back against the excesses of the crazed lefty/communist/globalist/whatevers to potentially buy us a lot of time.
Luongo's work has taken awhile to digest and is still an adjustment for me but it does now seem the most plausible and even better, it gives us hope to see things are not always doomed to get worse. I often wonder what Robert Wenzel would have thought of this - one of the last people I followed who really seemed to have his finger on the pulse of the economy. I'd like to see more engagement of senior folks affiliated with the Mises Institute with these ideas as well - geopolitics is a complex rabbit trail for some of them I'm sure but what Luongo says about SOFR and such I just don't see anyone else talking about yet.
Thanks, Matthew. Yes, I've been there. Once you awaken to the fact that the monetary and political systems are not in the little guy's interests, there's a tendency to go ultra dark (take the "black pill" so to speak).
But then, if you trudge on and keep an open mind, you realize that as Americans, there's still a lot to be thankful for. And although we may want maximum liberty right now, we must face reality: Incremental steps towards greater freedom are better than nothing.
I too followed Robert Wenzel for about a decade. I worked for him as a research assistant (my side hustle) from 2016 until his death in 2021. I think and hope that Bob would approve of this piece.
I also hope that there's more circulation of these contrarian Fed ideas among Austrolibertarians. In the run up to the 2024 US Presidential race, Powell will face an angry gauntlet of progressives, conservatives and libertarians.
Please help spread the word that Powell is in our corner. More people need to be in his.
I remember seeing your name in some of his content!
I also want maximum liberty now, but there is no contradiction between my radical Rothbardian libertarianism and me rooting for the worse tyrant to fail: the Davos crowd. And that means rooting for Powell - even though I don't think his position should exist, as long as it does, it should try to restore some sanity as he is starting to do. I'm seeing this view seeping deeper into our circles. Several weeks ago Tho Bishop mentioned it on Radio Rothbard; Tom Woods of course interviewed Luongo a few months ago... hopefully more engagement is coming soon.
Matthew - the "aha" moment that I had in October 2022, when I was convinced that Luongo's thesis was right, was nearly as powerful as me taking the libertarian red pill back in the early 2010s.
You're exactly right. There's no contradiction here. As you probably know, Rothbard advocated working within the existing system to push forward liberty. He voted. He supported construction businesses taking government contracts.
We're facing a long haul toward a Rothbardian society. I'll take my wins where we can get them.
Glad to have you onboard. And I hope others in the Austrolibertarian, conservative and the dwindling, self-proclaimed "classic liberal" circles can get onboard, too.
This is a nice article. I saw it the same way last summer. Powell's language changed overnight when he was confirmed. I was happy to see it. I really hope you're right that the wealthy and banks will start investing their billions or trillions of dollars in real projects rather than wasting it on yet another start-up technology company.
JO - thanks. You were ahead of me on the new way of thinking about the Fed. Like I mentioned, I started questioning things in the summer of 2022. But I didn't fully accept that things were different until the fall. As for the shift in capital: I don't think it's a coincidence that Silicon Valley Bank collapsed, but First Republic Bank was backstopped by the NYC investment banks.
Very nice piece. It should be noted that this is possible because Trump dropped our corporate tax rate from the highest in the world(39%) to 21%, dropped 10s of thousands of regulations, and implemented first-point-of-sale-in-Asia tariffs. Along with unleashing American energy development(That has since been destroyed).
I work at a very profitable American OEM designing and manufacturing durable goods and we are on backorder across the board and it is not all supply-chain issues. We are moving Asia made products back here with very low cost increases. Keep it up, Jay!
Danimal - thanks for the insight into your industry. And I'm glad that you enjoyed the piece.
Are you related to David Burge?
I assume that you're referring to this David Burge (https://twitter.com/iowahawkblog).
If his family is originally from Iowa, I'm probably not related to him.
Great substack
Thanks!
Yes, I can't read Williams that well but I agree a change at NY fed is significant. Brainerd leaving too. I believe there were no dissenters for 25bps. Shocker.
Another point to consider were the 2 doves ousted in 2021 before the hiking started.
Tp100 - also consider what transpired with John Williams. Williams is the architect of the Secure Overnight Financing Rate (SOFR), the debt financing standard that replaces LIBOR on June 30, 2023. US debt indexed to SOFR means that when European banks "catch a cold" so to speak, the fallout won't affect US banks.
In 2018, John Williams moved from the President of the San Francisco Fed the President of the NY Fed - the one with the trading desk and that gives him a permanent spot on the Federal Open Market Committee (FOMC).
America-firster Trump gave bankers the opportunity to make big moves.
I assume you are familiar with this
https://steemit.com/money/@survivebubble/wishes-and-rainbows-comic-book-2007-edition-the-federal-reserve-bank-s-plot-to-destroy-fiat-money
https://www.bostonfed.org/publications/economic-education/wishes-and-rainbows.aspx
It doesn't matter who heads the Fed at this point. Contrary to an overwhelmingly popular academic notion the Fed doesn't manage the economy it distorts it by distorting the most important set of prices in an economy; rates of interest. With short rates now having been pushed to the ludicrous, and terminal, nominal nil level the multi decade avoid hangovers stay drunk routine is over. We can now anticipate four decades of monetary, and fiscal, distortion being wrung from the system via accelerating currency debasement and consequent general price inflation; probably over a decade or more (the only alternative is deflationary collapse). This is not a cycle you can hold through. Tangible assets offer refuge for those who act in a timely manner.
any writer on economy who doesn't point out that SPENDING not INTEREST rates is what controls an economy is either a useful idiot or a lying tool....pay attention to how every billion and trillion added to the budget keeps the wallstreet inflation engine running and the rate increases only ensure that americans will be taxed to death by the owners of deficit debt and who is the biggest owner of debt ? not japan, not china....it is the fed reserve itself....wake up fools !
Powell, Brainard, Yellen, Dimon and Fraser are members of the liberal-fascist Council on Foreign Relations (CFR) which has dominated US policy since WW2.
David Rubenstein, co-founder of the Carlyle Group, is the CFR chairman. Powell is a former Carlyle partner. Larry Fink of BlackRock, which "partners" with the Fed, is a CFR director. Fink and Rubenstein are also trustees at the Davos WEF.
Liberal-fascism: rule by a corporatist oligarchy, behind a false front of "liberal democracy".
I have one question that no one wants to answer. We all know the Fed is a privately owned entity that controls the world’s reserve currency but we don’t know who owns it. So who owns the Fed? Answer that question and you will understand who exactly controls the American Empire and what the economic agenda is.
Assume Powell is a good guy. If Powell allows CBDC to exist at all, then we are going to be slaves. The only point is when. Powell won't be there forever. The next person in the chair or the one after that, will then be free to enslave us with the non-currency, fully trackable, fully programmable CBDC tokens.
Ghost Rider - maybe. But the powers that be (Davos, commies within the US government, etc.) want you to be hopeless. I'm not.
About 15-20% of us said no to all their crap over the last 3 years. You could view this two ways: 1) There's no way to fight against these overwhelming numbers, or 2) There's a hardcore base that won't budge; and as long as this base exists, the squishy middle - the 50%, 60%, maybe even 80% of people - will realize that the pushback against the globalist trash is legitimate, and they'll want to join the winning side.
I believe that that the 15-20% that you speak of gets larger every day.
I think so, too. It's not growing as fast as I'd like.
But when more revelations of the malice of the last three years comes to light, we might see exponential adoption. I'm looking forward to more people on the side of liberty.
Is this the Babylon Bee?
Powell stood by and helped inflation run wild by increasing the money supply and supporting massive government deficits while the supply line was being destroyed by governments and unemployment was rising due to the actions of various state and local governments. Then he decides to destroy the economy while not speaking out about the still increasing massive deficits and causing unemployment to increase. He along with the idiot Yellen who said deficits have no effect on inflation need to be tarred and feather and run out of town. The Fed has created every boom and busy including the Great Depression since its creation. Both Powell and Yellen are perfect examples of the Peter Principal are are to be derided instead of being praised.
He's a lifelong DC lawyer who knows zero about economics.
Hey, I know, let's make Evel Knievel the bldg manager of the Corning Glass Works.
What could go wrong??