The Federal Reserve's second 100 years

Dianna Ingram | Bergman Group

The Federal Reserve has had a remarkable career in the 100 years since Congress created it on December 23, 1913. What are the Fed’s next 100 years likely to bring?

It is daunting but also liberating to make such guesses about the very long term, since one is bound to get many things wrong. The human mind is incapable of imagining in advance the novelties that so much time will bring. For example, the authors of the Federal Reserve Act could certainly not have even imagined, let alone expected, what their creation has become in a century. They would have been utterly dumbfounded at a Federal Reserve that:

  • Is formally committed to, and is producing on purpose, perpetual inflation.
  • Has no link of any kind to a gold standard.
  • Thinks it is supposed to, and that it is capable of, “managing the economy.”
  • Invests vast amounts in, and monetizes, real estate mortgages.
  • Has chairmen who achieve media star status, as for example, “The Maestro.”
  • Wields the authority of a unitary central bank, centralized in Washington D.C., rather than being a federal system of regional “reserve banks.”

Can we have any hope of making some good predictions? Perhaps. Consider the 100-year predictions that the brilliant F.E. Smith, Lord Birkenhead, made in 1930 in his book, The World In 2030.

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Alex J.
Pollock

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