JC3 (@Cochran)

**Central Bank Independence? ** Fed Chairman Powell is the latest central bank apologist to bleat about the Fed's "independence" being threatened by politics. Central bank supporters claim that central banks controlled by political processes tend to have higher inflation rates than those w/more independent central banks. One academic paper by Alessina and Summers from the late 80s (JMCB) for example, purports to show empirically that this is so (and there are others). Trouble is for the A&S paper and the broader concept of CB independence, their comparisons are closed loop. In short, they are only comparing situations that contain central banks. They never compared their claim to non-central banked systems, as existed in the US, for example, from Reconstruction to 1913, and when inflation rates were close to zero or even negative. But the even broader and more important question asks exactly what are the banks seeking independence from? Simply put, they seek independence from the political process itself. That is, independence from control or oversight. They wish, in other words, to conduct their price manipulation schemes and interest rate distortions without proper oversight by the people who suffer from their constant barrage of mistakes and depredations. The idea apparently is, the Fed, having a stable of dozens of PhD economists has to better informed on their specialties than the Congress or the people. Seems plausible, but on closer inspection however, this is absurdly untrue. And it's not b/c the Fed's PhDs are stupid (though they may be--after all, they chose to work for the Fed), but b/c they lack the basic data to inform their decisions. Yes, it's true the Fed collects reams of data and runs loads of sophisticated models in an attempt to divine where markets are headed. But all the data and analysis in the world will not tell you where we are headed, only where we have been. At best, you get a vague and imprecise idea surrounded by probabilities and confidence intervals. The fundamental difficulty here is the data the Fed absolutely require for correct forward-looking forecasts do not yet exist. Those data (such as goods prices, revealed preferences, interest rates, bond prices, and so on) ONLY come into existence as the market operates; that is, as transactions occur. There is no magic data tree out there w/all the bits required for answers; that is, there is no way to reliably know or predict market outcomes in advance. And the better PhDs at the Fed know this. They know both they and the Fed are playing a mug's game. They've got the Congress, the media, and academia buffaloed into believing the Fed actually has the best interests of the US and its people at heart. This is palpable nonsense. In the best case, the Fed is merely indifferent. In the worst, it is what it has been for over a hundred years: A parasitic organization that drains the wealth and economic vigor of our country through a process of sustained inflation, usury, and incestuous "regulation." It is well-past time to call the Fed's bluff: The emperor has no data clothes. Or to paraphrase Pres. Trump, "They don't know what they f#ck they're doing." ....To which I would add a corollary: They don't know because they CANT know. Bottom line: Get the Fed out of the monetary policy business. They've already stolen 96% of the dollar's purchasing power, don't give them the other 4 cents. #End the Fed before it ends US. https://x.com/TheStormRedux/status/2011267395504013700