Fed nominee Judy Shelton could be in trouble as key GOP senators express concerns on 'outlier' views

[sandensea]

One of President Trump’s nominees to the Federal Reserve Board, Judy Shelton, could be in trouble after her heated confirmation hearing Thursday.

Sen. Patrick J. Toomey (PA) and Sen. Richard C. Shelby (AL), top Republicans on the Senate Banking, Housing and Urban Affairs Committee, told reporters after they left the hearing room that they had “concerns” about Shelton.

If either senator votes against her, it would sink her confirmation hearing, making her Trump’s fifth Fed pick not to make it through the GOP-controlled Senate.

Shelton, 65, has spent years advocating for the United States to return to something akin to the gold standard, a view outside the mainstream that many economists say could hamper the nation’s ability to fight recessions.

The U.S. abandoned the gold standard in 1933, in the depths of the Great Depression.

More troubling to many is that Shelton criticized ultralow interest rates when President Barack Obama was in office but has recently embraced them, seemingly to align with Trump.

Many economists and investors say the Fed must be independent of political pressure to make the best decisions for the economy, but Shelton has questioned that tenet.

Shelton herself has been an outspoken Fed critic: “Why do we need a central bank?” she wrote in 2009. “What the Federal Reserve is doing is very close to central planning.”

At: https://www.washingtonpost.com/business/2020/02/13/trumps-fed-nominee-judy-shelton-could-be-trouble-key-gop-senators-express-concerns-about-her-outlier-views/

Fool's gold: Trump Fed nominee Judy Shelton argues for a return to the gold standard - a policy largely abandoned by most world powers during the Great Depression due to its highly restrictive effects on credit.

[empedocles]

1. Yes

[sandensea]

3. The segregationist witch would take us back to 1932.

Oh, joy.

[guillaumeb]

2. Where do they find these people?

Another unqualified name from the seemingly endless list that the GOP maintains.

[sandensea]

4. Gold for me - but not for thee

That's basically what motivates most of these goldniks.

The gold standard, as they know very well, would severely limit the money supply mostly by strangling fractional banking - the dynamic which allows banks to lend many times their deposits, and thus keep the economy moving.

It would, however, concentrate wealth (and power) in the hands of those sitting on large gold hoards - which is what Shelton (and her billionaire husband) wants, the consequences be damned.

Fun fact: Julius Caesar was assassinated because he imposed the gold standard over Rome - causing a sudden and severe contraction in their (already very poor) economy.

[guillaumeb]

5. A very good explanation of how banks lend.

And yes, it would concentrate wealth, and really boost the price of precious metals in general.

[sandensea]

7. Thank you.

That's what they want: a return to 1932.

[stopdiggin]

6. does this make sense even to the 1% ?

no central bank? gold standard?
I don't understand.

[guillaumeb]

8. The price of gold would skyrocket.

And with no central bank to, in theory, regulate the banks, we should expect even more banking bubbles.

[sandensea]

9. Yes. As guillaume pointed out, it would hyper-concentrate wealth into those hoarding gold, platinum.

For the rest of us, a nearly credit-deprived economy like Argentina's.

[stopdiggin]

10. what doesn't make sense to me is

is that the vast majority of the very rich profit far more from our financial systems (foreign and domestic) the way they are .. and most of them are not gold bugs in any sense at all. Right?

As an example (since he's making the appointment) where does the Trump family's fortune intersect with, or benefit from, a gold standard? (they made their money off of real estate and government subsidies .. and LOTS of loans)

[sandensea]

11. Problem is, there's a subsection of the elite who think there are TOO MANY rich people

They want it all to themselves.

And Cheeto, of course, wants to join the club - something he could never do otherwise, since he's always lost money.