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Source link: http://archive.mises.org/2541/mr-bailout/

Mr. Bailout

September 30, 2004 by

Under Alan Greenspan’s rule at the Fed, the function of the central bank as a bailout institution has experienced a new golden age. The adoration that the chairman has earned from the financial markets and the various governments by which he was re-appointed a total of five times has come mainly from the expectation that he would stand ready to provide the liquidity the Fed’s clientele demands. [Full Article]

{ 3 comments }

Larry Nieves September 30, 2004 at 9:06 am

Great article. One I think one of the hardest task we have is uncovering the public perception that central banks are stabilisers of the economy.

Please check the links to the footnotes, they are sending to the manager editor or something like that!
An example

Jurgen Abels September 30, 2004 at 4:50 pm

What we need are more articles of this nature and get them into the main US publications and news services to inform the general public. Politicians of all parties are hiding and don’t want to be the messengers of the bad news. A very sad state of affairs for the US and the world. Nobody will be able to bail them out since they have the world only reserve currency.

Chris Toto October 1, 2004 at 2:46 pm

Re: Dr. Bailout Antony Mueller’s survey critique of Greenspan’s FRS chairman tenure was interesting, especially in light of Greenspan’s earlier career pro-gold screeds. But I wonder, isn’t it possible Greenspan has realized something that his critics haven’t? For example, that the entire Federal Reserve system is bogus, top to bottom and that he’s just trying to make the best overall outcome from a hopelessly botched monetary system? How about the fact that the Fed’s FRNs monetize debt instead of wealth? How about the fact that the Fed’s monetary issue is structured with the presumption of a zero sum economy, that the production of some new wealth (seeking new monetary issue) necessitates the creation of a new debt owed, ransomed to someone? How about, if the “backing value” of money is all the real wealth in an economy, not just the tiny fraction of all wealth represented by ounces of metal specie, how could gold be anything but a “fraction” of an economy’s total wealth? Seems to me that a “gold backed” monetary system was always doomed to be a fraudulent fractional reserve system anyway. Ask any Whiskey Rebel. I think that whatever good Greenspan as Fed Chairman has done will eventually be found to be his keeping an eye on the production of new wealth values in relation to new currency issue. Greenspan was fortunate that for a while a huge amount of new value was developed in the applicationo of IT to commerce. Unfortunately, the flood of monetary issue has rended huge amounts of this value away from the original producers to the holders of the new buying claim title deeds, new FRNs.

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