The Fed

More and more, Fed appointees are dropping their apolitical facade.

Unfortunately for us, James Grant is right.

Why is the Fed holding so many secret meetings lately?

Congress is hardly a great steward of financial power, but there are benefits to wrestling control of the money supply away from the Fed and returning it to Congress.

Following the unconventional monetary policy of negative interest rates, central banks are now considering an even more desperate measure: "helicopter money."

Given the monetary dark arts being practiced around the world, I would much prefer my money in the hands of Gringotts goblin, than at the mercy of our Federal Reserve Chairman Who-Must-Not-Be-Named.

If helicopter money is implemented, those who first gain the use of the new money may benefit by increasing consumption before prices rise, while others will see prices rise before they are able or willing to use the money. But the end result will be higher prices but no overall increase in welfare. 

The Fed says it's scaling back its Quantitative Easing programs, but it still maintains a huge balance sheet. Unfortunately, the Fed has no plan to really unwind its massive QE programs, and has backed itself into a corner.

Analogies involving cars and firepower are not appropriate for monetary policy. They propagate the idea that the Fed can carefully "steer" the economy or that they have some large, heterogeneous set of policy tools, when the Fed can really only do one thing: artificial credit expansion.

Speculation is swirling as to what the Federal Reserve might do next. None of the likely next steps are terribly promising.