The FED Is Now The Fourth Branch of The U.S. Government - a podcast by McAlvany ICA

Unelected power of central bankers challenges representative government

Is there a way to limit the continually growing leviathan of centrally managed markets?

Technocracy & the “overmighty citizen”



The McAlvany Weekly Commentary

with David McAlvany and Kevin Orrick



The FED Is Now The Fourth Branch of The U.S. Government

November 27, 2019



“We have what was the end of the first central bank and the second central bank here in America as a result of populism and distrust in government. I wonder how the general republic responds to the next crisis. That is where most agencies see their opportunity to intervene and ratchet to an even more significant role, never to cede that role in the future.”



David McAlvany



Kevin: Looking back at governments and societies through time we have elected governments and then we have tyrannical governments, but oftentimes we have unelected governments and it is usually in the form of the military. These days, Dave, it seems it is not the military that has made the coup her in America, but actually, the unelected power of the central bank, itself, the Federal Reserve. Last week you said it was costing us $183 per person per day for the 60 billion dollar insertion that is being called “not QE.” I don’t remember voting for that.



David: Well, no, there are so many things that we don’t vote for anymore and are not really represented in terms of who is putting it in motion. Are they our represented elected officials or not? So there are two veins of thought on my mind presently. One relates to the markets. We have had a number of multiple Hindenburg omens in the last few weeks, and the divergences we spoke of in the marketplace with declining volumes, even as prices increased. A number of things are on my mind in that regard.



But also, toward the sort of tendency to delegate power in a democracy, and again, this is, as you mentioned, the unelected officials. I am laboring through a nearly 600-page book by a retired central banker and self-acknowledged technocrat who now teaches at Harvard. I guess that is where all good technocrats go (laughs) after they have spent some time out there in the working world.



I guess before we get too far into our conversation today, Kevin, we could have probably had last week’s comments on stuffed turkey, our Nassim Taleb reference. Maybe that would be better suited for this week, at least for our North American audience. So happy Thanksgiving to all of you are in the habit of gathering and spending time together as a family this week, or wherever you may be. I hope that the wine flows, as well the conversation, and that tryptophan brings you great rest (laughs).



Kevin: Truly, we do have so many things to be thankful for, and I think it is important that we do focus on that which we truly should be thankful for. But going back to what we were talking about here, obviously, there is some control that needs to be maintained, but not everything is going to be electable. We have seen military coups in the past where everyone who was elected got thrown out. Now, in this particular case, like I brought up with the central bank, the Federal Reserve, and actually if we were to look around the world, Europe is definitely like this as well, you have people who are very, very powerful in the room and you could say, “Well, gosh, who made you boss?”



David: Right. And it’s pretty ordinary to have delegated power in some places, so for instance, you mentioned the military. That’s fairly common. That is power that is not elected. You rise in the ranks, it’s a merit-based process, and the accountability is generally to, at least as structured here in the United States, the Commander in Chief, that is, the president.



Kevin: And actually, this country was designed to have some unelected power tha...

Further episodes of PodCasts Archives - McAlvany Weekly Commentary

Further podcasts by McAlvany ICA

Website of McAlvany ICA