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Volcker Sends Warning Shot to Fed, Wall St, and DC Recommended

Posted by Larry Doyle on May 30, 2013 9:27 AM |

In what can only be described as a Sense on Cents Instant Classic, perhaps the most highly respected chair in the history of the Federal Reserve, that being Paul Volcker, delivered a tremendous address yesterday at the Economic Club of New York.

For anybody who cares about the well being of our markets, our economy, and our nation, I strongly recommend you take a mere ten minutes to fully read and absorb the wisdom of Volcker’s words.

What are some of the highlights?

Volcker targets the Fed in stating:

There is something else beyond the necessary mechanics and timely action that is at stake. The credibility of the Federal Reserve, its commitment to maintain price stability and its ability to stand up against pressing and partisan political pressures is critical.

Independence can’t just be a slogan. In the last analysis, independence rests on perceptions of high competence, of unquestioned integrity, of broad competence, of non-conflicted judgment and the will to act.

That’s what I’m talking about!!

Volcker maintains that the Fed’s primary focus must be on price stability and the defense of our currency and not be charged or asked to do too much. Little doubt he sends this warning shot given the ineptitude of those on the fiscal side of the equation to get their/our house in order.

He launches another volley in addressing the captured regulatory cesspool in which we are drowning. He asserts:

The simple fact is the United States doesn’t need six financial regulatory agencies. It is a recipe for indecision, neglect, and  stalemate, adding up to ineffectiveness. The time has come for change.

As things stand today, I am told that can’t happen and won’t happen. However powerful the arguments for action, the vested interest — within the agencies, in the Congress and outside — are just too strong.

I ask you, can we let that view stand unchallenged?

He saves his best for last . . .

The erosion of confidence and trust in the financial world, in the financial authorities that oversee it, and in Government generally is palpable. That can’t be healthy for markets generally or for the regulatory community. It surely can’t be healthy for the world’s greatest democracy, now challenged in its role of political and economic leadership.

What is Volcker doing in an attempt to clean up the cesspool that defines the Wall Street – Washington incest? He has launched The Volcker Alliance. I will add that link to the Watchdogs in the right hand sidebar here at Sense on Cents.

While the names of Larry Summers and Janet Yellen are bandied about as the next head of the Federal Reserve, we need to embrace the work and wisdom of Paul Volcker if we care to save our nation.

Please take the few minutes to read and then share his delivery, Central Banking at a Crossroad.

Volcker speech

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Ted

    If the bankers were not running the nation, maybe just maybe somebody in Washington might come up with the bright idea to let Paul Volcker chair the Fed again.

    At the bare minimum he should be a senior economic adviser with a massive and influential portfolio to throw his weight around Washington and Wall Street.

    A great read.

  • GMA

    Thank you for this encouraging article. Once again, the saying comes to mind: “All that is needed for evil to succeed is for good men (and women) to do nothing”. The tasks outlined by Chairman Volcker are gargantuan, but it’s past time for fair minded and capable citizens to take them on. The curtains have been drawn back and I believe the American public is catching on to all of the manipulations that benefit an elite few while a significant majority of citizens flounder and wonder what happened to the promise of our country and to their sense of financial well being.

  • According to CFTC Commissioner Bart Chilton, barely a third of the Dodd-Frank rules have been written to actually implement the law.

    “Much of Dodd-Frank is dying on the vine. Lobbying, litigation and lawmakers who have tried to defund and defang Dodd-Frank have all brought rule writing to a crawl. Regulators themselves have become overly concerned about finalizing rules. Over-analysis paralysis, fears of litigation risks, and the lack of people power have all contributed to the slowdown.”

    He describes the so-called Volcker Rule – a key aspect of Dodd-Frank meant to keep big taxpayer-backed banks from speculating – as “apparently dead in the water.”

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