Loading ...Of course, some people are saying, “Well, we need Paul Volcker back again. Somebody like that would magically solve things.”
What Volcker did 40 years ago was good, necessary, and courageous. But I don’t think they will dare a repeat performance now because the house of cards has been built much, much higher than it was in Volcker’s day. If somebody steps into Volcker’s shoes, they’ll be pilloried for causing the collapse of the financial world and the economy with it.
That’s what they should do—let it collapse and abolish the Fed. Most of the real wealth will still be here. But they won’t. For one thing, the USG needs the Fed to finance its gigantic deficits. In Volker’s day, they said “we owed it to ourselves” or could peddle their debt to foreigners. No more. Plus, the USG, with about $32 trillion of debt, can’t afford high rates. If rates simply equaled the level of inflation, their interest payments would exceed 100% of their tax income—about $4 trillion. This seals the fate of the US dollar. I’d hate to be the chairman of the Fed at this point. There’s really nothing that they can do—even if they were competent.
https://www.zerohedge.com/markets/doug-casey-crashing-markets-commodities-what-happens-next