President Obama has reportedly narrowed his choices for the next Chairman of the Federal Reserve to three individuals: Larry Summers, Janet Yellen and Donald L. Kohn. According to one contrarian investor, who is an ardent critic of the central bank, all of the next successors of Ben Bernanke will lead the United States to “economic ruin.”
Peter Schiff, president of Euro Pacific Capital ‘and author of “The Real Crash,” spoke with Yahoo! Finance last week and explained that whether it’s the current Fed Vice-Chair or former Treasury Secretary, both will not improve the economy whatsoever because they all still believe in the regulation of the market through artificially low interest rates and a pre-determined money supply – the current policy of the Fed.
“Of all the choices, Yellen is probably the worst of the bunch,” stated Schiff. “I think the U.S. economy is in trouble regardless of who President Obama chooses because it's going to be more of the same policies that have brought the country to the brink of economic ruin."
Schiff was asked who he would like to see tapped as the next Fed Chair. Although he didn’t name one person, the former Republican Senate candidate said the next person needs to understand that the overall economy needs higher interest rates, sound money and a central bank that forces the federal government to cut its habits of spending and borrowing.
In the end, according to Schiff, neither Yellen nor any of the potential White House nominees will be up for the job.
“We're not going to get any of that so long as we have a Fed chairman that is complicit in what the government is doing to subsidize big government and excess to avoid the pain of doing the right thing," Schiff explained. "That's why the economy is suffering and why it's going to suffer so much more in the future."
Other libertarian comments
Ron Paul, former Texas Republican Congressman and three-time presidential candidate, has repeatedly expressed similar sentiments, most recently in an interview with CNN and a statement issued to Fortune. He noted that all of the front-runners want to maintain the status quo of bailouts, inflation and stimulus. Paul, who recently established The Ron Paul Channel, also said that the Fed has devalued the U.S. dollar by 98 percent.
“Dr. Paul would prefer we get rid of central economic planning via a central bank. All mentioned candidates believe that one person or a committee has the knowledge to dictate the correct interest rate and rate of growth of the money supply, which they do not,” a spokesperson for the bestselling author. “The main point is that Dr. Paul doesn't believe the current failed policies of the Reserve would change if any of the mentioned candidates were to become Fed Chair.”
Marc Faber, the editor of the Gloom Boom & Doom Report, said in an interview in 2010 with Kitco News that Yellen is “ignorant.”
“As far as the eye can see, interest rates under Bernanke will stay at zero and below,” said Faber. “Janet Yellen, another totally ignorant economist removed from any reality, said herself six months ago, ‘If I could implement interest rates below zero, I would do it.’ So now you know what the policy in the U.S. will be.”
Bill Bonner, founder of Agora, published a piece earlier this month titled “Why the Three Front Runners for Fed Chair Should Be Rejected.” In it, he writes:
“Janet Yellen has three things going for her. According to Alan Blinder’s recent piece in The Wall Street Journal, she (1) is a woman, 2) is a good diplomat and (3) has been around the Fed since 1990 and nothing bad has happened.
“We offer a trio of replies. (1) There are roughly 120 million adult women in the US; womanhood is not a qualification for the job. (2) Diplomacy is irrelevant. (3) Having been around since 1990 is a disqualifier. Yellen was at the Fed as US total debt rose from about 230% of GDP to over 350%. If she had had her wits about her, she would have realized that the Fed was enabling a huge credit bubble that would one day burst. Yellen should be passed over.”
Aside from shutting down the Federal Reserve within time, no one has really published a list of great names to head the central bank and implementing real Austrian Economics solutions. Capital Liberty News had several names that it thought would be good alternatives to the present officials being considered:
Gary Johnson (maybe)
Murray N. Rothbard (dead)
Ludwig von Mises (dead)
Henry Hazlitt (dead)