- The Washington Times - Saturday, July 12, 2008


In the article “Bernanke calls for new Fed power” (Business, Wednesday), you report that Federal Reserve Chairman Ben S. Bernanke thinks that the Federal Reserve Board “should have more power to regulate Wall Street firms and the complex financial products that they create[.]”

I disagree. There are better alternatives. During Ron Paul’s presidential run, he advocated abolishing the Federal Reserve and replacing it with the gold standard. In addition, Nobel laureate Friedrich Hayek advocated a monetary system with competing currencies. Milton Friedman, another Nobel Prize winner and advocate of free markets, suggested that we should abolish the Federal Reserve and replace it with a computer that would increase the money supply at a steady rate. Investor Jim Rogers has called for Mr. Bernanke to resign and for the Fed to be abolished - as a means of boosting the dollar and speeding up economic recovery.

Instead of giving the Federal Reserve more power, we should abolish it and do what Mr. Friedman, Mr. Paul or a combination of these thinkers have suggested. We should allow for competing currencies, as recommended by Mr. Hayek, to ensure a stronger dollar and a stable currency.

Mr. Rogers once pointed out that no country has ever succeeded by debasing its currency. However, this is something the Federal Reserve has done since its inception in 1913, particularly in 2002, when Alan Greenspan lowered the Fed funds rates to 1 percent and kept them there for a year, which helped create the housing bubble.



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