Source | 智 本社 (ID : zhibenshe0-1)

Author | 清和

Header | REUTERS, Fed Chairman Powell and U.S. President Trump

Under the epidemic, in the midst of the stock market disaster, the danger is surging, and the U.S. Senate has passed a huge relief bill totaling $ 2 trillion-

Pay up to $ 1200 for individuals, $ 2,400 for couples, and $ 500 extra per child;

Establishing a $ 500 billion taxpayer fund pool to provide loans or loan guarantees to businesses;

A $ 350 billion loan to small businesses to pay salaries, wages and benefits;

Provides $ 58 billion to airlines to pay employees’ salaries, salaries and benefits, as well as loans and loan guarantees;

US $ 117 billion in grants to hospitals and veterans health care;

US $ 17 billion in loans and loan guarantees to companies related to national security;

Providing US $ 16 billion for national strategic medicine and medical supplies reserves;

It also includes the expansion of unemployment insurance, deferred tax payment, tax reduction and exemption, and exemption of student loan interest.

This is a “wartime-level” rescue plan and “one of the most expensive and far-reaching measures ever made in the United States.”

The reason the Trump administration is free to rescue the market is because the Fed provides unlimited liquidity support.

This month, after the Fed lowered interest rates to zero, it entered the crisis management mode in advance and launched a “bottom-line” rescue plan:

Unlimited purchase of treasury bonds and mortgage bonds; bypassing commercial banks to provide enterprises and individuals with multiple types of loans; buying corporate bonds and trading open-end index funds (ETFs) directly in the secondary market.

The Federal Reserve is not like the “last lender,” but the “last buyer.”

How should we evaluate this rescue operation?

This action has caused many people to fall into contradictions and economics to fall into a paradox: failure to save may cause an immediate crisis, and rescue may lead to a greater crisis in the future.

Many brokerage economists who support interventionism have criticized the Fed for “drinking thirst and quenching thirst.” Weekly investors who oppose interventionism are welcoming the good and craving the Fed’s liquidity.

If Keynes, Fisher, Mises, Friedman, and Volcker were alive, how would they evaluate the Fed and Trump administration’s rescue operations? Is the Fed’s action “out of bounds”? Is this saving the market or saving people? How to save the city and save people, and how to cooperate?

In the face of economic and social crises, how can the central bank and the government rescue? This article delves into the inherent logic of the market, the central bank, and the operation of the currency, attempts to eliminate misunderstandings, explain paradoxes, and clear the root cause.

01. “Wartime level”: What happened to the United States?

The new crown epidemic is spreading at an alarming rate in the United States, and the number of people infected and the number of deaths is skyrocketing.

After the outbreak of the US stock market disaster, it is impacting the real economy and society. Enterprises, factories, schools, and stores in most states across the country are closing, markets are disrupted, logistics is blocked, orders are cancelled, workers are unemployed, and business closures are spreading. The state is expected to announce a record number of people claiming unemployment benefits.

In the current era of globalization, capital is highly liquid and infectious viruses are highly contagious. Faced with the “dual liquidity” blow from market crises and public health events, the Fed and the Trump administration are seeing the “devil” haunting: Treasury bonds, corporate bonds, asset management mines, and possibly increasing unemployment and corporate and family bankruptcies.

The current crisis in the United States can be specifically broken down into stock disasters and public health crises:

1. The epidemic situation has caused a plunge in oil prices, which has caused the collapse of financial asset prices. At present, it can be defined as a stock market disaster.

How far this stock disaster is from the financial crisis depends on whether the US Federal Reserve can hold government bonds and eliminate “asset management mines.” The Fed purchases government bonds indefinitely, and directly purchases trading open-end index funds (ETFs). Such as rescue operations, direct blood transfusions to government bonds, the stock market, and asset management institutions can be described as key points.

Expected to ease liquidity tension in the short term, temporarilyThe stock market disaster was prevented from hitting commercial banks and national credit, and the alarm of the financial crisis was eased.

2. However, the public health crisis of the epidemic is pushing the US real economy to the brink of economic crisis and may even trigger a social crisis.

So, we see that this rescue operation by the US government and the Federal Reserve goes beyond the scope of the city rescue, and belongs to the “wartime level” social rescue: it is both a city rescue and a people rescue, as well as a financial crisis and economic crisis and society crisis.

This is in line with our previous “out of control” in Europe and America. What should China do? The logic of the United States’ response to the disaster: economic accounts.

In the United States, the boundary between civil rights and government responsibility is very clear, and the government has no right to rashly close the city. The government can only gradually increase the level according to the spread of the epidemic, up to the wartime level.

In the process of upgrading, the government must have a comprehensive rescue and compensation plan. Businesses, factories, and schools are closed, and the government has to provide corporate loans, tax benefits, worker wages, unemployment benefits, and cash compensation. Without this rescue plan, the death toll from the economic crash could be more severe than the new crown epidemic.

Even at the “wartime level”, China ’s salvation law is still different from that of the United States: China decisively fights the rapid annihilation war, then resumes work and resumes production, and major infrastructure stimulus; the United States first uses the funds of the Federal Reserve and the federal government, and then There is a constant trade-off between outbreak prevention and control and economic sustainability.

So, what we see is that the actions of the US government seem to save the city more than people.

Keynesians equate economic crisis with social disasters. They believe that saving the market is actually saving people. Many people remember a famous quote from Keynes: “In the long run, we are all dead.” People live in the present, the crisis is now, survival is the first.

The post-Keynesian Stiglitz urged the government to pay less attention to the deficit, as in World War II, and let go of the rescue.

In fact, if these two trillion-dollar rescue plan is implemented, the US debt ratio will rise to 119%, exceeding the highest level during the World War II (118.9%)

Critics say the move will undoubtedly quench thirst, and US Treasury bonds will continue to inflate and will die even worse in the future.

This controversy lasted a full hundred years. Just 100 years ago, just after the end of the First World War, a group of young Cambridge economists faced the ravaged world and began to doubt what neoclassicalism said: the “flower of evil” yields the good results of public interest. (“The Parable of the Bee》, Mandeville)

After more than 100 years, we have gone through various debates between Keynesianism, the Austrian School, neoclassicalism, neoliberalism, neo-institutional economics, and game theory. We are still confused: save or not?

My point is that salvation is affirmative, but salvation cannot be made “silly”, otherwise it will not save people but harm others.

There is a fundamental problem to understand here: saving society and saving markets, saving people and saving businesses, there is an essential difference.

Many people liken the market to their lives, and people are dying. This is actually a very wrong analogy.

The structure and logic of the market is different from that of people: the market is a distributed structure, and its operating logic is spontaneous order; human life is centralized, and its operating logic is a central command system.

One death is one less. The government has the responsibility to save the lives of every citizen and the responsibility to ensure that social order does not collapse.

So the government must save people and society.

However, the market is different. The vitality of the market lies in mutual games. Every day, companies die, companies are created every day, companies make money every day, and companies lose money every day. When the economy is booming, many companies make money, and when the economy is in recession, many companies lose money.

There is only a market for making money without losing money, and this market will certainly disappear. If the government rescues the loss-making enterprises, it is equivalent to rewarding the enterprises that lose money, rewarding entrepreneurs who make wrong decisions and taking risks, and hurting entrepreneurs who make correct decisions.

This will cause two kinds of hazards: one is moral hazard, and the other is market distortion, which will ultimately reduce market efficiency. The end result is that the government and the Federal Reserve have become the “last buyer”. In fact, it is the entire people who pay for the wrong decisions and operating risks of the entire market.

The market follows the law of freedom, not the logic of democracy. Social and political issues can be solved by democratic voting, but democracy cannot be used in the market.

The economic crisis has come, many companies have closed down, many companies have lost money, and the government cannot save the market for the benefit of the “majority.” And personal. The status of a small number of people is equal to that of the majority, otherwise it is easy to trigger “tyranny of the majority”.

Some people say that if the economy is in recession, life expectancy will decline if people do n’t save the city, and some people will commit suicide because of life distress.?

What I want to say is that the messy and confused effect of saving the city is that the economic recession is more serious. This is not to save people but to hurt people.

In reality, as long as the economic recession is prone to cause “the tyranny of the majority”, most people vote to pass the bailout plan and “crowd money by helicopter.”

Actually, this is a free-rider behavior. The central bank is a public good, and everyone is trying to hitchhike with a credit currency to weather the crisis. But it turned out to be a “tragedy of the commons”-the collapse of asset bubbles or inflation.

So saving the society and the individual is completely different from saving the market and the enterprise. This is not a moral issue or a democratic issue, but it is determined by the difference in their structure and operating logic.

02. Rescue gesture: How to save the city?

So, shouldn’t the government help?

Of course not! How can the government help when a social crisis or economic crisis breaks out?

First, save people and society.

The core responsibility of the government is to save people and society, not to save the city.

Usually, the government needs to provide comprehensive public supplies, such as medical care, education, welfare housing, social insurance, infrastructure, public health systems, public finances, strategic reserve resources, legal systems, national institutions, and judicial systems.

When a crisis breaks out, the government can launch a rescue plan, initiate emergency procedures, invest strategic reserve resources, increase public financial investment, provide more relief and unemployment benefits, reduce taxes, extend taxes, and protect the lives and property of people. ,and many more.

This rescue operation follows the majority principle.

Second, save the market to a limited extent and extremely harshly.

Theoretically, the government should withdraw from the market intervention and separate the “rescue the market” from the government’s responsibility. This is the most beneficial to the economy.

However, it’s hard to do. Because the economic crisis and the social crisis are inseparable, it is often the economic crisis that causes the social crisis. The government may choose to intervene in advance and intervene in the economic crisis in advance to prevent the outbreak of social crisis.

This is the difference between politics and economics: economics studies objective laws, and politics pays attention to the subjective art of compromise. Economics reportTell people what is right and what they should “go”; politics believes that the solution to the current problem is the right path.

If I have to explain why the government saved the market from an economic perspective, what I can think of is transaction cost theory.

Friedman’s permanent income hypothesis proves that Keynes’ demand theory (monetary drive) does not hold. Therefore, it is impossible to support the government to rescue the city from the Keynesian perspective, but the theory of new institutional economics can.

From the perspective of new institutional economics, the only reason for the existence of government and public goods is to reduce transaction costs.

The government’s rescue of the market or limited market rescue will of course reduce market efficiency and increase transaction costs, but if the economic crisis induces a social crisis, the transaction costs of the market may be higher.

The government, like ordinary people, makes choices on the margins. Rescue the market or not, the depth of involvement depends entirely on the balance of marginal transaction costs.

If Boeing goes bankrupt, can it be saved? Without help, the collapse of this company may trigger a chain reaction, with a large number of enterprises closing down and workers losing their jobs, so the transaction costs have risen sharply. Rather than save the society, it is better to intervene to save the market and save large enterprises in advance.

If you rescue Boeing, it will induce moral hazard and increase transaction costs. What moral hazard? Boeing knows that it is “too big to fail”, “strongly” asked the federal government for $ 60 billion in rescue, and refused to exchange stocks.

This is actually a moral hazard induced by the federal government and the Federal Reserve’s large-scale rescue of large enterprises in 2008-disguised incentives for Wall Street financial institutions and large enterprises to take risks. Such rescue will only amplify the risks.

So how do you rescue? Two conditions must be met:

First, strictly follow the rules of Badget.

Baget’s rules are specifically designed to address moral hazard and are designed to reduce payment costs. The government must formulate harsh rescue conditions, such as the definition of the rescue target, asset and liability requirements, punitive interest rates, and so on.

As mentioned in the Trump administration ’s rescue conditions:

“Prevent President Trump and his family business from receiving emergency assistance from taxpayers”, “This provision also applies to Vice President Pence, the head of the executive branch, members of Congress and their families”, which is the definition of the object of assistance .

“Prohibition from Government Loans Repaying LoansRepurchase of stocks one year before the end of the payment period “and” prohibit employees or executives with at least $ 425,000 in income last year from raising wages “, this is a liability clause for the rescued enterprises.

However, these rescue conditions are too loose and not harsh enough.

Second, the rescue funds come from the government’s public finances, and the central bank’s easing policy should be used with caution.

There is an essential difference between fiscal expansion rescue and currency expansion rescue:

Different responsibilities: The main responsibility of currency expansion or contraction is to maintain the stability of currency prices. Only at the moment of crisis can the “last lender” process be initiated.

The effect is different: currency expansion means that the currency in the market increases “out of thin air”; fiscal expansion is the transfer of funds, that is, the transfer of funds from the government to the market, enterprises and individuals. The government cannot expand its finances indefinitely, and it will be more cautious given fiscal pressure.

So, it is necessary to set the rescue fund gradient:

First level: government financial funds;

Second level: government financial guarantee, central bank loan;

Third level: central bank direct loans (final lenders).

These three levels are based on marginal transaction costs, are applicable to different crisis levels and targets, and have strict procedures and rescue conditions.

Comparing to the above, let’s take a look at what problems the Fed and the US government have in the rescue:

The core issue is that the Fed and the U.S. government have separate responsibilities and bundled interests.

Since the 1980s and 1990s, the European and American central banks pursued independence. Why should they be independent?

Currency is a very special public good. The central bank cannot serve any government, enterprise, or individual. Otherwise, it will cause huge wealth injustice.

However, the Fed is now fully tied to the interests of the US government, the US dollar and US debt are anchored to each other: the US Federal Reserve purchases government bonds to issue US dollars, and the US government has the Fed’s unbridled expansion of its deficit.

Why is this happening?

The main reason is that the Fed’s responsibilities are unclear. After Black Monday in 1987, the “economic czar” Greenspan’s desire for power expanded, and the Fed’s responsibility extended from regulating inflation to employment, financial vulnerability, and government deficits.

The central bankWhat exactly is your responsibility?

The role of the central bank is actually very simple, and that is to maintain the stability of currency prices. This is determined by the nature of money-an intermediary that solves the problem of transaction convenience, which is equivalent to a reference for price stability. (This is the key to understanding the problem)

Maintaining currency stability is the sacred duty of the central bank, not the “last lender”.

After the 1990s, the New Zealand Central Bank, the Bank of Canada, the Deutsche Bank, and the Bank of England all took this as their goal (single-target system of inflation rate). The amount of currency issued depends entirely on the level of inflation.

The Fed played the role of “central mother” and was eventually kidnapped by the “father” (Federal Government Treasury).

After Greenspan stepped down, the U.S. financial crisis broke out, and the Fed did not have the opportunity to adjust. Bernanke implemented quantitative easing. The Fed was deeply tied to the federal government. Now the Fed is unable to extricate itself.

What do you mean?

In order to maintain financial stability and government fiscal deficits, the Federal Reserve has repeatedly compromised with the federal government, lowered interest rates, purchased government bonds, and helped the Treasury finance. As a result, the federal fiscal deficit is getting higher and higher, the size of national debt is getting larger, and more and more national debt assets are on the Fed’s balance sheet. The Federal Reserve has been abducted by the federal government and can only serve it indefinitely.

This is a reckless “collusion”.

03. US Dollar Dilemma: How to change?

Serious consequences of Federal Reserve binding with the US government:

1. The US government kidnapped the Federal Reserve, and the Fed kidnapped the market. The market suffered from Stockholm syndrome.

Why did the Fed kidnap the market?

The U.S. President is an elected president. When the economy is in recession, when the unemployment rate is falling, when the stock market is down, and financial risks exist, the president will call the Fed to “release water.” Over the past few years, Trump has always been aggressive, while Powell has been losing ground. The US Federal Reserve’s monetary policy was restrained by the President of the United States and indirectly “take orders” from the market and the people. Driven by the free-rider motive, the people certainly want more “water.”

Once the hitchhiker succeeds, another group suffers and is even more susceptible to Stockholm syndrome.

What is Stockholm Syndrome?

For example, you originally walked well, and suddenly a strong man threw you into the water. When he was drowning, he picked you up again, and you thank him for everything.

The Fed has forced entrepreneurs and individuals who made the right decisions into the water, and the “physical constitution” of these enterprises and individuals has gradually become vulnerable. Once the crisis has come, they have to ask the Fed to “release water.” This is where the Fed in turn abducted the market.

From Black Monday in 1987, the economic recession in 1990, the Internet crisis in 2001, the financial crisis in 2008, and the stock market and epidemic disasters, people have repeatedly strengthened Stockholm Syndrome: Fortunately, the Federal Reserve has saved the city. Fortunately, the US government saved me.

The free-rider motive and Stockholm Syndrome work together, and the money market becomes a tragedy of commons where everyone is eating opium.

Second, the US government kidnapped the Federal Reserve, the Federal Reserve kidnapped global financial markets and other central banks.

The reason the Fed is so willful is that it can “water” indefinitely, and the US dollar index can still rise sharply, relying on the credit of the US dollar: the world’s largest reserve currency and international settlement currency.

US dollar credit is derived from the strength of the United States. Today, the United States is the only superpower, and the US dollar and US debt have enough credit to overdraw. However, the Fed’s expansion of its USD overdraft credit has caused “harm” to other countries.

This is where the Fed collects coinage taxes from the world, and the US government seizes monopoly rents from the world.

The Fed prints banknotes. Americans can buy goods in the international market by holding US dollars. This is a coinage tax. Should this coinage tax be collected?

Using the US dollar is the result of the market voting with feet. The advantage of using the US dollar is that the US dollar has better credit, lower global transaction costs, and facilitates international trade and local currency issuance. Therefore, the coinage tax is actually the cost of using the US dollar in the world.

However, another coinage tax has been criticized.

The Fed has used the crisis to repeatedly collect coinage taxes. For example, after the crisis broke out, the US Federal Reserve expanded its currency, but the US dollar rose sharply. International capital returned to the United States to provide liquidity to the US financial market. The financial markets in other countries were even more in crisis due to lack of liquidity.

This is the “crisis transformation” and “dollar hegemony” that have been criticized.

The U.S. Federal Reserve expands the US dollar. Central banks such as Japan, China, and Saudi Arabia are holding large-scale US dollar assets and US debt, and have to follow the expansion of the currency. Even in EuropeThe central bank and the Bank of England have better mechanisms, but they have also been kidnapped by the Federal Reserve, making it difficult to maintain independence in monetary policy. The financial cycle of some countries is the opposite of that of the United States, and it is easy for a crisis to occur when the Fed tightens its currency.

No way, in the era of credit currency, the logic of competition is a comparison of relative strength. The gold standard currency requires absolute strength, that is, the amount of gold reserves and a fixed parity. However, the credit currency is different. The anchor of the currency is the national credit. As long as the national credit of the United States is stronger than other countries, the US dollar is still the “tall among the short men.”

So, the Fed has set a ceiling for world economic growth.

However, in the long run, the Fed’s bundling with the federal government is actually consuming the United States.

Although after each crisis, the United States is still second to none and the dollar is still unshakable, the absolute competitiveness of the United States will certainly decline.

This can be explained by Douglas North’s national theory (“System, Institutional Change and Economic Performance”, Douglas North).

North finds that there may be two choices for the government when the country promotes institutional change:

The first is to establish a set of rules to maximize monopoly rents;

The second is to reduce transaction costs to maximize social output and increase government tax revenue.

Before, the US government chose the second option and strived to reduce transaction costs. The goals of economic growth and tax increase were consistent. However, after the US government kidnapped the Fed, it turned to the first goal, which was to grab monopoly rents for currency issuance.

The specific approach is to use the Federal Reserve’s currency issuance monopoly to monetize its fiscal deficit and expand national debt and fiscal deficits on a large scale.

Once the government ’s main revenue comes from monopoly rents, including land finance and central bank printing, the government ’s goals will deviate from the goals of economic growth and social well-being.

Only by putting government revenues within taxation, rather than monetizing rents and fiscal deficits, can government actions be committed to reducing transaction costs and promoting economic growth.

So, “easy weight loss” is a pseudo-proposition. At the same time that massive currency stimulates, it can also actively carry out reform to promote growth, which is contrary to human nature.

The U.S. government has embarked on the path of monopoly rents, and the result must be the inflation of debt, rising bubbles, overdraft countries, technological innovation, and the impetus for real growth to decline.

The problem is not just in the United States. The monopoly of government revenue rents (monetization of fiscal deficits) is a world trend since the 2008 financial crisis.

What to do?

I think after the crisis, the US Congress needs to make a series of binding bills as soon as possible.

North said that the system is the rule of social games, and its advantage is to define and limit the set of people’s choices.

Human motivation is blind and irrational. The uncertainty and complexity of the environment often exceed people’s rational perception. Based on these two points, we need to formulate a system to cope with uncertainty: in times of crisis, the system can restrain self-irrational behaviors, such as requiring the Federal Reserve to “release water.”

So, after the crisis, when the scars haven’t forgotten, it’s time to legislate. Including:

I. Strive to restrict federal government revenue to tax revenue

The federal government can issue treasury bonds, but the treasury bonds must be guaranteed by taxes, not US dollars. The federal government provides loans or bailouts to necessary businesses, but must use fiscal revenue. To use the Federal Reserve to provide loans to businesses, it must be guaranteed by fiscal revenue.

If you do this, U.S. Treasury bonds will collapse suddenly. After all, the scale of Treasury bonds and interest rates is too large to support tax revenue.

Therefore, the legislation should not be too tight. It can be gradient. According to the time axis, the federal government is forced to reduce deficits year by year, try to increase taxes, and gradually return to the tax constraint framework.

After all, this is the basic requirement of a social contract. That is, people pay taxes, and the government provides public services to citizens based on tax revenue. The government has no right to use or interfere with the Fed’s coinage to achieve any purpose.

Second, the responsibility of binding the Federal Reserve

Current Fed policy goals include employment, financial stability and inflation. Congress must reduce or deprive the Federal Reserve’s two major responsibilities and goals of regulating employment and financial stability. why?

These two goals are not the goals of the central bank, but the goals of the government. If these two goals exist, it is easy for the Fed to bind the federal government and undermine the independence of monetary policy.

The Fed’s only goal is to stabilize currency prices. The main responsibility of the Fed is to maintain the stability of currency prices. Monetary policy is still loose or tight.Contraction, with reference to currency prices.

However, I disagree with either Friedman’s monetary target or the world’s popular inflation target.

Friedman’s monetary target is scientific in theory, but difficult to operate. Compared with the price mechanism, the response of the supply mechanism is less sensitive and lagging. The market can quickly identify price signals (inflation rate, interest rate) and take action. However, the Fed’s open market operations and how much government debt it has purchased are not sensitive to the market.

Why do n’t you like to target inflation?

This is a good target, but inflation does not reflect the full picture of currency prices. In the past few decades, the European and US central banks have targeted inflation (usually 2%). As long as this goal can be maintained, the central bank can issue more currencies.

As a result, inflation is well controlled, but currency issuance is rampant. A large number of currencies ran into the financial market and real estate sectors, causing asset prices to skyrocket, capital idling, and hollowing out the industry.

Although prices have not risen, asset prices have risen and real estate prices have risen, which also indicates that the currency value is unstable.

Therefore, it is suspected to target inflation only: low inflation comforts the poor, high asset prices encourage the rich, the middle class suffers, and ultimately it is not good for the country or the people. The European and American world has long fallen into a trap: low interest rates, low inflation, low growth, high leverage, and high bubbles.

In fact, currency is the reference for the entire market. There are many indicators of currency prices, including not only the inflation rate (usually expressed as prices), but also the production price index (PPI), interest rates, exchange rates, stock prices, futures prices, real estate Price, gold price, crude oil price, etc.

So, the establishment of a comprehensive price index based on prices and including factors such as the production price index, exchange rates, real estate and financial asset prices, may be more scientific as the goal of monetary policy.

Three, establish a risk gradient mechanism

First level risk: corresponds to the economic stability cycle.

The Fed has only one monetary goal and responsibility: the composite price index. The Fed focuses on interest rate regulation and open market operations.

Secondary risks: corresponding to government deficit crisis and economic crisis.

The Fed can to some extent break the restrictions of the composite price index and fulfill the “final lender”Responsibilities: Lending money to the government and financial institutions “limitedly” through quantitative easing, but it is necessary to strictly implement the Badget rules and specify strict rescue conditions, such as Congress approval, punitive interest rates, and asset-liability ratios.

Three levels of risk: Corresponding to social crises and national wartime conditions.

The Federal Reserve can break through constraints and fully support the needs of the federal government and the market, including direct loans to enterprises and individuals, purchase of corporate bonds and trading open index funds (ETFs).

Fed Chairman Powell considers the current “atypical economic downturn.” This time the Federal Reserve and the US federal government launched a “wartime level” rescue market. If it meets the third level of risk, its rescue plan itself will not be a big problem. The core of the problem lies in the rescue process, the Fed’s mechanism, and the federal government’s monopoly rent model.

Currently, in accordance with Article 13 (3) of the Federal Reserve Act, in an “abnormal and emergency situation”, if five or more members of the Federal Reserve Board vote to agree, the Federal Reserve may vote to any individual, partnership, or agency Loans.

This decree gives the Fed directors too much power. At present, the Fed relies on scholarly principles and elite decisions, that is, “only rely on reliable economic principles and data to act.”

This approach is somewhat ideal. Fed directors face “asymmetric risks” and easily succumb to political, bloc and populist pressures. Only in the case of secondary risk, tertiary risk and the approval of Congress, the Fed will have corresponding powers.

Of course, unless there is a stagflation crisis or a major social crisis similar to the one in 70 years, the United States will continue to charge a global coinage tax, and Congress will lack the motivation to change.

Finally, the problems of the US government and the Federal Reserve should be encouraged by all countries.