When will these markets get back to business? Probably soon.
But not yet. Yesterday was another meaningless, directionless, pointless day.
Even the financial press seems to be out at the beach. Nothing much of interest has come our way for weeks.
And still no call from the White House! We’ve been sitting by the phone. Every once in a while, we make a ‘hurrummmp’ sound to clear the throat…ready to reply…
‘Yes, Mr. President… Bill Bonner here.
‘Take the job of running the Federal Reserve?
‘Well, I don’t know. How much does it pay?
‘Is that all? Do I get health insurance too?
‘Well, OK, I guess so. But it’s a big change. So I need to check with my wife.’
But all this rehearsal has been in vain. The phone hasn’t rung. The person not calling is none other than Barack Obama. And the job he’s not offering — chairman of the Federal Reserve — is the very job that your editor is clearly, decisively, no-questions-about-it, most suited for.
Ah, glad you asked.
You see, there are some jobs that require real skill. Don’t ask us to fix your computer or to make you a fine piece of furniture. When it comes to electronics, we’re better off without them. And as for fine woodworking, if we can’t do it with a chainsaw, call someone else.
But central banking? Right up our alley.
It is a profession akin to air-traffic control…or night watchman. If an air-traffic controller does his job, everything goes smoothly. But his scope for artistry and improvement is limited.
He cannot do a better job by improvising novel systems or causing pilots to undertake unorthodox procedures.
He is more like an accountant than a screenwriter. If he does his job well, the accountant adds two plus two and gets four. He cannot do better and get five or six. Four is all he can get.
So too, the air-traffic controller can help make sure people get where they were going safely. If he does his job well, things will turn out as expected. But if he does a ‘brilliant’ job, travellers end up where they didn’t expect to go; he has not really added to the sum of human happiness. Out-of-the-box air traffic controlling will not make the world a better place. It can only make a mess of things.
Likewise, the best a central banker can do is the normal thing. Creative central banking — and experimental central bank policies — should be avoided. They don’t make the world a better place; they only take people where they didn’t want to go.
At best, the central banker is a dull person who does more or less nothing. He doesn’t build anything, invent anything, create anything, manipulate anything, jiggle anything, twist anything, pull anything, push anything, increase anything, decrease anything, adjust anything, fix anything, stimulate anything or even touch anything…
The ideal central banker keeps to his essential mission. Like a night watchman, he does nothing at all. He merely surrenders the premises in the morning exactly as he found them the night before.
Not only does the ideal central banker not do anything; neither does he think anything. The last thing you want in a central banker is the energy and brilliance of a man like Larry Summers who has many thoughts (almost all of them terrible).
Instead, you want a central banker who rarely thinks at all. And then, when he does have a thought, it is not about central banking.
That’s why our favourite central banker of all time was a Frenchman. Yes, who can forget Emile Moreau? Apparently, everyone!
Even the people who live in this area of France…scarcely five miles from Emile Moreau’s home…can’t remember the man.
Last night, at dinner, we asked friends.
‘Have you ever heard of Emile Moreau?’
‘Emile Moreau. Governor of the Bank of France between 1926 and 1930. You passed his house on your way here tonight.’
What was marvellous about Monsieur Moreau was that he was a central banker able to keep things in proper perspective. He attended a central bankers summit in the mid-1920s — along with Benjamin Strong from the Federal Reserve and Montagu Norman of the Bank of England.
On the agenda were the most pressing and important issues of the day — how to save the British economy…and how to settle the reparations issue and avoid another world war.
But what was on Moreau’s mind was something much more important: hunting season. When the season opened in this part of France, at the end of August, Moreau promptly left the conference and took up his shotgun.
We hope to be able to follow Moreau’s great example and to live up to the standards he set for himself and his profession.
Of course, some will argue that we lack the experience necessary to do the job.
True, we have no experience as a banker. In fact, we haven’t written a check in at least 35 years.
Nor have we stepped foot into a bank in at least 25 years — except for a brief visit to the Waterford branch of the Bank of Ireland. (The poor bank has no money. We felt sorry for the clerks; we thought we might cheer them up.)
But there are some things that are best done without training or experience. When you get married to a young woman, for example, you don’t want her to be too skilled in the art of lovemaking. You’ll wonder where she got the training!
Likewise, you’re better off with a virgin central banker. Preferably one headed to a convent!
No kidding. When it comes to debauching a currency, once is already too often. Better to get a central banker who claims he has never done it before…and who pledges never, ever to do it again.
for Markets and Money
From the Archives…
Treasurer Bowen: Australian Economy in Crisis
9-08-2013 – Nick Hubble
Bonner For Fed Chairman Over Larry Summers
8-08-2013 – Bill Bonner
Interest Rate Troubles and a House Price Bubble
7-08-2013 – Nick Hubble
Australia’s Shadow Banking Sector is Collapsing
6-08-2013 – Nick Hubble
Diesel Goes to Caulfield and Callum to the Alfred
5-08-2013 – Nick Hubble
You must download and read this report NOW.
As of 1 January, 2017, the Australian government will introduce harsher asset test changes that could affect your income.
Inside your free report, rogue economist Vern Gowdie reveals what he believes you could do right now to boost your age pension income. If you’re at, or near, retirement age…download Vern’s report today.
- Three ways you could boost your age pension payments now: Trying to squeeze a few extra bucks out of the government can be like drawing blood from a stone. It’s HARD. Fortunately, Vern’s discovered three ways you could boost your age pension payments (number #3 will surprise you).
- Will you be hit by the age pension changes in 2017: As of 1 January, 2017, the Australian government will introduce a series of harsher asset test changes for the age pension. Will your income be hit by the new changes? Download Vern’s report to find out.
- Retire in luxury overseas (on the cheap): An increasing number of Aussies are packing up and moving overseas to retire. No wonder. Your total living expenses in an exotic location like Thailand or Costa Rica could be HALF what you’d expect to pay here in Australia. Cheap food, rent and medical costs are just some of the reasons waves of retirees are heading for warmer climates permanently. How does a shift overseas affect your pension entitlements? Vern explains in his report.
To download your free report, ‘What You Need to Know about Changes to the Age Pension’, simply subscribe to Markets and Money for FREE today. Enter your email in the box below and click ‘Send My Free Report’.
You can cancel your subscription at any time.