Sunday, January 22, 2012

Top Ten Banker: Kill the Fed and Return to Gold

By Eric Heyl of the Pittsburgh Tribune

John Allison is the former chairman and CEO of BB&T, the nation's 10th-largest financial holding company. He was named one of the 100 most successful CEOs by the Harvard Business Review and since 2009 has been on the Wake Forest University Schools of Business faculty as Distinguished Professor of Practice.

Allison spoke to the Trib about the Federal Reserve Board's detrimental effect on the nation's slow recovery from the worst economic downturn since the Great Depression.

Q: Can the Fed be labeled more of a hindrance than a help to the recovery?

A: In my view, absolutely yes. You have a group of government bureaucrats who are in a massive redistribution of wealth in the United States. The Fed, by its own acknowledgement, is holding interest rates lower than they should be. They're doing that to subsidize homeowners, many of whom bought too-big houses. And who pays for that? People who save money -- particularly older people, who are now getting much lower interest rates on their certificates of deposit than they would be getting if we had a market-determined interest rate.

Q: What do you see as the primary problem with the Fed?

A: It's a group of very smart, highly educated people with good intentions who have a problem they simply can't solve. I don't care how smart you are and how many models you have, you cannot really integrate the economic activity of 7 billion people on this planet. The Fed thinks they're smarter than markets, which in fact they aren't, and they're constantly making mistakes.

Q: In the long term, what do you think should be done with the Fed?

A: If I were in charge, I would get rid of the Fed. I believe that as long as the Fed exists, Congress can effectively print money. And it doesn't matter whether they are Democrats or Republicans, they would rather print money than tax people. They want to spend because that effectively buys votes, and they don't want to tax people because that loses votes.

I think the Fed provides the temptation for massive government deficits. If the federal government couldn't print money, it would have to have better financial discipline than it has today.

Q: Eliminating the Fed isn't politically realistic though, is it?

A: One thing we could do that might be politically possible would be to go to a gold standard -- you really would say a market-based standard, but I'm sure the market would pick gold and if it did that, it would impose a lot of discipline on the Fed.

Read the rest here.


  1. John Allison is an Objectivist and a great contributor to liberty. If you haven't heard this guy speak, I would highly recommend finding a video or podcast.

  2. I think he's quoting what Ron Paul proposed to return to gold: abolish legal tender law and capital gain taxes on currencies and precious metals. Then you'll be able to choose whether to write contracts and do business in USD (or foreign paper money) or gold and silver without interference from the government.

  3. Fed with good intention? They are criminals.

    1. Yeah, agree completely and yet, this dude is a BANKER. Even with the buffering statement, I can't believe he even said what he said. No invite for him to the Fed Christmas party this year, and maybe an extra thorough audit of BB&T's books is being arranged.

  4. Yes, all these bankers really, really hate Gold.

    The FED is end of life as far as the Money Power is concerned and it is ready to dump it.

    Gold has served the Money Power well for centuries and they are hoping to reinstate their favorite currency.

  5. Returning to the gold standard at this time, while failing to kill the Fed and all such tools of the Money Masters, would just be a band-aid on a mortal wound. BTW, who do you think has been accumulating the vast majority of gold for some time now? Hint: it rhymes with tankers. "Returning to the gold standard" is just one of the possible next phases of the Money Masters' scheme of absolute control. There is nothing wrong with fiat money, in se. In a way, all money is fiat, as money is just an agreed-upon medium of exchange that facilitates the exchange of items with real value, such as food. That said, what IS critical is WHO issues the money and controls its volume. Godspeed.

  6. All fiat currencies fail because those in power cannot resist monetization. It's much too simple for govts to paper over their spend-crazed addictions as they pass out monetary favors in exchange for votes and power . Gold makes for a stable money..because it is historically the only true, real money ( along with silver ). Gold is finite. It takes time and resources to get out of the ground and into circulation. The U.S congress must do their jobs, assume responsiblity by ousting the Fed's control & take over our money supply. The people, through their representatives, must have power over our monetary system or we will collapse and be economically enslaved.