“Not Terribly Encouraging”: Mitt Romney Hints He Might Oppose Fed Nominee Judy Shelton In Latest Attack On Trump

Is this the beginning of the second round of Republican resistance to President Trump’s slate of nominees for the Fed board of governors? Or just the latest example of Mitt Romney trying to sabotage Trump out of spite?

Or maybe he simply hates low interest rates?

Whatever the reason, the freshman senator from Utah is reportedly ‘undecided’ on whether he’ll back one of Trump’s two latest nominees for the two empty seats on the board of governors.

Judy Shelton, known for her opposition to the Fed and support for the gold standard, has repeatedly spoken out against the Fed’s loose monetary policy. But like Stephen Moore before her, she has changed tack more recently to support President Trump’s agenda for the “non-partisan” and “apolitical” Fed.

Last year, we reminded readers about this in a post about gold’s reaction to the news of Shelton’s nomination that on April 21, Shelton published an op-ed in the Wall Street Journal entitled “The Case for Monetary Regime Change.

Since President Trump announced his intention to nominate Herman Cain and Stephen Moore to serve on the Federal Reserve’s board of governors, mainstream commentators have made a point of dismissing anyone sympathetic to a gold standard as crankish or unqualified.

But it is wholly legitimate, and entirely prudent, to question the infallibility of the Federal Reserve in calibrating the money supply to the needs of the economy. No other government institution had more influence over the creation of money and credit in the lead-up to the devastating 2008 global meltdown. And the Fed’s response to the meltdown may have exacerbated the damage by lowering the incentive for banks to fund private-sector growth.

What began as an emergency decision in the wake of the financial crisis to pay interest to commercial banks on excess reserves has become the Fed’s main mechanism for conducting monetary policy. To raise interest rates, the Fed increases the rate it pays banks to keep their $1.5 trillion in excess reserves—eight times what is required—parked in accounts at Federal Reserve district banks. Rewarding banks for holding excess reserves in sterile depository accounts at the Fed rather than making loans to the public does not help create business or spur job creation.

Meanwhile, for all the talk of a “rules-based” system for international trade, there are no rules when it comes to ensuring a level monetary playing field. The classical gold standard established an international benchmark for currency values, consistent with free-trade principles. Today’s arrangements permit governments to manipulate their currencies to gain an export advantage.

Money is meant to serve as a reliable unit of account and store of value across borders and through time. It’s entirely reasonable to ask whether this might be better assured by linking the supply of money and credit to gold or some other reference point as opposed to relying on the judgment of a dozen or so monetary officials meeting eight times a year to set interest rates. A linked system could allow currency convertibility by individuals (as under a gold standard) or foreign central banks (as under Bretton Woods). Either way, it could redress inflationary pressures.

Judy Shelton is author of the 1998 book Money Meltdown; and she once concluded that “central bankers, and their defenders, have proven less than omniscient.”

So why does Trump want Shelton on the board? Simple: she previously said that if appointed, she would lower interest rates to 0% in one to two years.

Last year, Trump’s first slate of candidates for the two empty seats, former Godfather’s Pizza CEO Herman Cain and WSJ op-ed columnist Stephen Moore, were pulled after Republicans raised questions about sexual misconduct allegations and other issues.

Jim Rickards and others said at the time that the end of Moore’s nomination would open the door for a Shelton nomination. Trump is also reportedly set to nominate Christopher Waller, an uncontroversial Fed insider and executive vice president and director of research at the St. Louis Fed.

Every time Romney tries to screw Trump by siding with Democrats on legislation, voting to impeach, or stymieing his nominees, just remember this photo from Romney’s dinner with Trump when he was supposedly under consideration for Secretary of State.

The question now is whether other Republican moderates who don’t exactly have the best relationship with Trump – people like Susan Collins and Lisa Murkowski – join Romney.

Author: Tyler Durden

Source: Zero Hedge: “Not Terribly Encouraging”: Mitt Romney Hints He Might Oppose Fed Nominee Judy Shelton In Latest Attack On Trump

Ad Blocker Detected!

Advertisements fund this website. Please disable your adblocking software or whitelist our website.
Thank You!
Social Share Buttons and Icons powered by Ultimatelysocial