Program begins, that will be Cassandra King talking about her book a lowcountry heart reflections on a writing life, she is the widow of novelist pat conroy. In the meantime we want to give you a chance to talk with john tamny who you just Start Talking tamny who you just Start Talking about fed . what taylor swift, uber, and robots tell us about money, credit, and why we should abolish americas central bank. 2027488200. For those in east and central time zones 2027488201. And a mountain and pacific time zones, lets get right to calls. Lets go to michael in georgetown, texas. You are on with john tamny. We are listening, please ask your question or make your comment for john comment for john tamny, tell us about money, credit, and why we should abolish americas central bank. Caller if Market Forces were going to eliminate the federal reserve, 4 trillion in debt, since they have no real resources to create new money, how does that wind out of the economy. Host john tamny. Unfortunately we got we are not hearing john tamny. Or john tamny is not hearing what is going on right now. We will get him ready so he is prepared. We will tell you what will happen through the day in savanna, Trinity United Methodist church in downtown savannah, one of the larger venues and a full day of coverage ahead. Cassandra king coming up, the widow of pat conroy and a novelist in her own right, her book is a Nonfiction Book she will be talking about, a lowcountry heart reflections on a writing life. After that Terry Mcdonald will be talking about the accidental life, what it is like to be a writer and give you a chance to talk with William Doherty who will be speaking this afternoon in the shadow of the ayatollah, former cia agent who was in iran in 1979. Foxbusiness newss gerri willis will be talking about rich is not a four letter word and taking calls with her and finally dance leg her, author of wolf boys, a professor at the university of chicago and his book is about drug trafficking. Right now we are with john tamny. Who needs the fed . what taylor swift, uber, and robots tell us about money, credit, and why we should abolish americas central bank, he is Political Editor of forbes, editor of realclearmarkets. Com, michael in georgetown, texas, repeat your question for john tamny, go ahead. Caller you said the free markets would effectively eliminate the federal reserve. How would that wind up with 4 trillion in debt creative through quantitative easing . Guest that is priced by the markets. Markets understand gradually that will be applying down. It is not going to be instantaneous. The feds influence is shrinking because the influence of banks is shrinking. That is the channel through which the fed presumes the economy, us banks represent 15 of total lending, that number in decline, all the really exciting Economic Activity occurs away from banking systems. The fed is not that influential. A convenient whipping boy, not very economically consequential. Host lets hear from bernie in new york. Go ahead. Caller with respect to the unwinding of the 4 trillion, what has to unwind it, why cant they keep purchasing bonds . What is to stop them from purchasing bonds forever . Guest it is a fair argument, implicit in his need for the fed to conduct open Market Operations is that banks wouldnt have an asset for their outlets outside the fed or treasuries wouldnt have a liquid market if they were to sell treasuries with an idea on increasing funds but of course they would. The treasury is the most liquid market in the world, it would still be liquid without the fed so if the fed were to remove itself there would be a huge demand for us debt which means if there was demand for loans increased a lot they could find assets and make loans with great ease. It is not that important. Host in your talk in savanna you talked about the fact you dont have a phd and you are not an economist. Guest yes. My view is economics in modern times has become fraudulent, about grass, charts and formulas and it has become rooted in things that are horrifyingly incorrect. Every economist you will never speak to if you ask what endeded the Great Depression will say the killing and naming around the world that was world war ii endeded the Great Depression. Any economist including anyone they freely acknowledge what causes inflation, they say it is too much Economic Growth so i think the economics profession is so offtrack because it lost sight that economics is about human action, why people do things, why people get up and go to work. I say thank goodness im not an economist because im not infected by a lot of the misunderstandings that have driven the profession. Host lucy is calling in from virginia. Go ahead. Caller when the financial meltdown occurred in 2008, prior to that the democrats pushed for subprime mortgages, so many people purchasing houses that were not qualified and therefore, i believe ultimately was precipitated by the fed when it raised Interest Rates a little bit, but that led to the collapse of the whole thing and by then, all the cdls and everything moved into wall street, everything spun out of control. If the fed is so wise you would think they were aware of what a simple rate hike would do. Do you see what i am saying . Guest it is a fair question. I would say first of all lets go back to the 1970s, the fed was increasing Interest Rates, we had a major housing boom that resembles what occurred in the 2000s so i dont think the fed had a lot to do with what led to this rush in housing but we mistake what caused the help down. You are correct a lot of people shouldnt have been buying houses bought houses and they shouldnt have been loaned to. If we allowed banks to fail and borrow except for those consequences there is no crisis. What caused the meltdown was the fed and the Bush Administration getting in the way. Markets were correcting, over purchasing very well and the bailouts began which created great uncertainty about what government would do on an annual basis which led to uncertainty on the way to a market crackdown but if there is no intervention there would have been a healthy creation in the market and banks would have failed but that is healthy. Capitalism is a function of success and failure but wouldnt have been the Global Market shakeup because intervention was the shakeup so i think even there, can the fed as an impact . Yes but not for the reasons people think. Host what would happen to us tomorrow if the fed were dismantled today . Guest say that again. Host what would happen to us tomorrow if the fed were dismantled today . People would be surprised by how little would happen. Well run banks dont need the fed. The productive economy simply doesnt need the fed. There probably would be failure among some banks but that would be healthy because better run banks would acquire the laggards and run them better. People vastly overstate the economic impact. The fed is not that important. They would stop buying us treasuries but massive demand for treasury, the problem now is we needlessly flatter the central bank and act as though its existence is essential for Economic Growth. The economy grows despite the fed and i would argue the fed cant stimulate growth or shrinkage very much. It is dealing with banks that are not that consequential to the overall economy. Host john is calling in from california. You are on the air. The us dollar is a major reserve currency for trading purposes on a global basis. What role does the fed play in that respect and what are the advantages and disadvantages to american taxpayers when their currency is the major reserve trading currency in the world. Host if you could repeat, john tamny had trouble hearing that which guest the us dollar is the major trade of major reserve currency in the world so most trade occurs in us dollars. What is the role of the fed in that regard and what are the advantages or disadvantages to the american taxpayer when their dollars play such an Important Role as major reserve currency for global trade. Host were you able to hear that . Guest yes i was. The fed can increase money supply in a broad sense, increase the supply of dollars and circulation through its open Market Operations or banks and assets from banks that increase the dollars. The fed plays a role. My book argues we vastly overstate the feds role in the value of the dollar. If you look at the major evaluation of the greenback since the fed began the first was 1933. Fdr devalued the dollar from 120 to 135, this was fdrs decision that eugene meyer resigned over. The next evaluation was 1971 with the fed arguing against what president nixon did delinking the dollar from gold so my broad point is Central Banks dont control the value of the dollar the way people assume. It was devalued before we had a central bank. It is more a political concept. What does it mean for taxpayers . I dont think that much. Thanks to the dollar being the reserve currency, realistically the federal government and i would argue this is a good thing, is able to borrow simply because it is backed by the most economically productive people on earth. Lots of people have Central Banks, the u. S. Treasury is able to borrow because americans are enormously productive economically so i think even when you look at the dollar we overrate a president ial a treasury concept. Host this is speculated, what if the euro became the major reserve currency . The treasury has done a lousy job of the dollar since 1971. It is not the Gold Standard, goals is the currencys value, 135th of assets gold, 120th of announce, the us had the worlds currency and persistently devaluing that currency in the 80s and 90s, those were booming decades, we had two decades of major devaluation so i would see another country either compete more ferociously with the treasury to be the worlds currency, we need some other entity to force treasury to be more responsible about maintaining the strong and stable dollar. I also think what will happen is technology is moving in the direction where increasingly private money sources will replace the traditional treasury dollars we earn. I wouldnt mind earning money at jpmorgan or visa dollar or Walmart Dollar because if they devalued on me i could replace them. With treasury having monopolies if they devalue we have nowhere to go so longterm private money as it historically has will replace government honey. Host in shepherdsville, kentucky, you are on booktv with john tamny. Caller thank you. I caught the tail end of your show. I have read a book or two about the formation of the federal reserve, very intriguing. I want to grab your book and read it but my question is do Credit Unions are they on the same play with the banks . Do they have the same relationship with the federal reserve, do you see us going back to a Gold Standard to return the money into the free market and have it back . I will hang up and listen. Guest you are asking any central question. Your point is so much credit occurs away from the banking system, i cant specifically talk about Credit Unions but what you describe happening, usaa, and a really excellent bank, lending club is huber for lending, they want to expose their savings to borrowers and had the money with lending club, which vets borrowers and lenders the money out so increasingly most lending occurs away from us banking system. What we know it terms of people getting loans, more and more taking away from banking and that is healthy because banks are so overregulated they cant take the risks, they would power innovative advances. In terms of the Gold Standard we are on the way back simply because if you look at the electorate, as long and frustrated by hurting dollars that dont hold their value not only evason rates paychecks but reduces the investment of how to gut Economic Growth. They are buying dollar income streams in the future so treasuries, the dollar makes investors more careful and less likely to commit their capital to innovative uses but what i ultimately think is going to happen is because governments have been so irresponsible with Money Technology will more and more make it possible for private money to be defined by Something Like gold to replace traditional government money. With technology, more and more will able to earn these private dollars that likely an issuer like that coin but far more credible, the dollars you earn from us will be defined as a set ounce of gold and people will get the stability they historically had, money wasnt a creation of the state, it was a creation of producers who wanted a common language to help them trade their goods with one another so money if it is not stable is not serving a singular purpose. It exists to exchange wealth. So gradually technology will get us back to the point we have money that is better than the Gold Standard money that is very stable. Host john john tamny is our guest, you listen to him at the savannah book festival. The name of the book, who needs the fed . what taylor swift, uber, and robots tell us about money, credit, and why we should abolish americas central bank. John tamny, thank you for spending a few minutes with our callers. Thanks for having me on. Host coming up next from savannah, live coverage on booktv, Cassandra King, novelist, widow of the novelist pat conroy and she will be talking about her Nonfiction Book a lowcountry heart reflections on a writing life. This is booktvs live coverage from savannah. Good morning. What a wonderful group. Or smack we have stragglers in the back. My name is linda huntoon. I am delighted to welcome you to the 10th annual savannah book festival presented by george r
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