In response to an FT article by Andrew Sentence on 19th September 2015, entitled 'The US Federal Reserve has got it wrong'
"First, how independent are central banks?"
1. I can say without fear of contradiction from any serving member of the Fed, the BoE, the ECB, or the BoJ that they are all totally independent.
2. They've all had a universal education in economics, which included all the economic schools that have ever existed. They have, for example a deep understanding of the free market ideas of von Mises and Hayek, the creative destruction thesis of Schumpeter, and the emerging field of complexity theory. Not for these guys the blinkered fascination with early Keynes, the ignorance of his later warnings, and a bit of cut and paste from Friedman in order to use the great depression as justification for money printing.
3. They constantly invite criticism of their existing thesis - as illustrated by the attendees at the IMF conference earlier this year 'Rethinking macro-economic policy', where they invited a stunning total of zero of the 12 economic thinkers who had predicted the last crisis. The zero free thinkers who attended were able to rub shoulders with, and challenge luminaries such as Robert Rubin, Larry Summers and Ben Bernanke, open minded souls who bear no responsibility for anything bad that has happened...ever...nothing whatsoever.
4. They refrain from marking each other's homework, awarding each other prizes, and inviting each other on panels
5. They never ingratiate themselves with high profile doers of God's work, nor do they take highly paid jobs with High Frequency Trading outfits like...what's it called... 'Castle' or some such thing
6. Under no circumstances do they ever intervene in markets (well apart from the BoJ and the PCOC). The fact that they have a volume discount on the COMEX is just coincidental - they didn't ask for that and they never use it.
7. Finally, and most importantly they never allow politicians to influence their decisions. Under no circumstances would a member of the BoE ever intervene in housing policy to help a Chancellor, nor would a member of the Fed ever do anything to help the politicians on Wall Street, I'm sorry I should have said 'Capitol Hill'.
Shame on you Mr Sentance - of course Central Banks are independent...in every way imaginable.
A fellow reader replied:
It may have been parody and quite funny if it was.
Parody? Would I ever use such a device Mr X? How could you suggest such a thing...
It would be unkind of me to mock a group of people who think they can replace the combined pricing information contained in the choices of 8 billion people with the intellectual equivalent of a monkey wrench...
...and surely it would disingenuous of me to suggest that the vanity of a group of such pseudo-scientists might lead them to actually believe they have been 'chosen' for their mastery of reality, rather than because they are the cleverest of the third generation of 'useful fools'...who have risen to the 'top' because:
a) they serve the hubris of politicians by maintaining the illusion that they can spend whatever they need in order to buy the electorate
b) they serve the vested interests of bankers by keeping the Ponzi scheme going as long as possible
Would I ever do such a thing...shame on you too Mr X.