Volcker – The Triumph of Persistence, by William L. Silber (2012)
SUMMARY THOUGHTS
- Published in 2012, this book provides fresh (and timely) historical context on the causal factors affecting the US Dollar
- Monetary Policy Style: critical contrast between the McChesney/Volcker Feds and the Burns/Bernanke Feds #study
- The book’s mapping of the sequence of political decisions made prior to Gold’s top in 1980 is well done (Chapter 11, New Territory)
CONTENT HIGHLIGHTS
- “Five American Presidents (3 Democrats, 2 Republicans), spanning nearly half a century, have called on Paul A Volcker to serve…” (pg 1)
- “Do not suffer your good nature to say yes when you ought to say no” –George Washington quote hanging in his father’s office (pg 15)
- “I never got along with the coach” –Volcker on his basketball coach @Princeton (1) #athlete (pg 17)
- “Morgenstern… left his mark by turning Paul into a professional skeptic” #German born economist, author of Theory of Games (pg 17)
- “Martin thought economists’ forecasts rivaled the accuracy of fortune tellers” #WilliamMcChesnyMartin, one of Volcker’s heroes (pg 21)
- “Kennedy Pledges He Will Maintain The Value of The Dollar” @NYTimes headline #1960, Gold was $35/oz - #perspective (pg 23)
- “Gnomes are imaginary, but speculators are not.” #1960s roots of our friend @DougKass macro machinations? (pg 27)
- “All I can remember after that was a word flashing in my brain like a yellow caution sign: Bullshit” #Samuelson #Keynes policies (pg 31)
- “Hayek’s words forever linked inflation and deception deep inside my head. And that connection, which undermines trust in government” (pg 33)
- “Charles de Gaulle pursued Gold the way Henry VIII did wives.” #1965 context #zeigeist of the times very different than today (pg 42)
- “If the US could change the rules in March 1968 and stop selling Gold… it could amend them further” #1968, Martin #StrongDollar (pg 50)
- “Failure to maintain those promises undermines trust in America. And trust is everything.” #1969, epic #StrongDollar quote by #JFK (pg 53)
- “Preserving the Dollar’s status had been the focus of Volcker’s favorite committee” #1969 Volcker Group, de Gaulle resigned 1969 (pg 60)
- “Chairman Martin wants to raise the discount rate.” But #LBJ wanted nothing of it (neither did Nixon) #USD credibility 1969 (pg 69)
- “Soon after becoming Fed Chairman in February 1970, Burns began to ease…” sound familiar? #Bernanke, didn’t work either (pg 72)
- “We can’t afford to risk a downturn, no matter how much inflation” –Nixon #1970 w/ #Burns Fed, conflicted/compromised (pg 73)
- “August 15, 1971… Nixon stunned the world in a televised Sunday night address” #GoldStandard, gone – thanks Nixon (pg 79)
- “The Coming Devaluation of the Dollar” @NYTimes May 1971, yep #sad – where it all started #Burns/Bernanke (pg 101)
- “If I have to talk to Burns again I’ll do it. Next time I’ll just bring him in” –Nixon, goodbye “independent” #FederalReserve (pg 105)
- “I don’t give a shit about the Lira” –Nixon, #1972 Dollar Debauchery (pg 110)
- “The difficulty is that no one is ever prepared to move except in a crisis” –Volcker #1973 (Shultz announced a 10% USD devaluation) (pg 117)
- “Burns exploited Volcker’s fixation with public service to persuade him to accept the Presidency of the Federal Reserve of NY” #1975 (pg 125)
- “The public’s resentment made sense, considering that consumer prices surged by 12% during 1974”, #output of 1971 Policies To Inflate (pg 129)
- “Whip Inflation Now” #WIN buttons for Jimmy Carter, elected into office #1976 to do a job he didn’t accomplish; #1970s = Stagflation (pg 133)
- “It’s the same old story – lack of confidence in US government policies” –Currency Analyst (in #Frankfurt), sound familiar? (pg 139)
- “Volcker participated in the Dollar rescue by requesting an increase from 8.5% to 9.5% in the discount rate” #1978 (pg 140)
- “I am not particularly eager to make a major move now or in the fore-seeable future.” –Volcker #1979, so #Gold rallied one last time (pg 156)
- “I think there’s a need to come in here as inconspicuously as possible… at diverse hotels” –Volcker #1979, no #Bernanke style #leaks (pg 165)
- “The price of Gold hit an all-time high of $850 an ounce on Monday, January 21, 1980” #study history vs causal #Fed factor (pg 182)
- “Jimmy Carter ended his honeymoon with Paul Vocker on October 2 , 1980, a month before the presidential election” #compromised (pg 190)
- “Partisan politics ought not be around the Dollar” –William McChesney Martin #Patriot #1980
- “Milton wants to abolish the Fed” –Arthur Burns #1980, the American #zeitgeist was very 2011 @RonPaul #libertarian (pg 194)
- “Do we really need the Fed” –Ronald Reagan #1980 message resonated with common sense (pg 195)
- “We obviously have a credibility problem – by “we” I mean the United States” –Volcker #1980 in “To Be or Not To Be a Central Banker” (pg 197)
- “People have to change their expectations and their behavior… that is always an uncomfortable process” –Volcker #1980 (pg 198)
- “I was very pleased to read a prediction that the price of gold will nosedive below $300/oz” –Reagan #1980 #StrongDollar leadership (pg 200)
- “None of us really understands what’s going on with all these numbers” –David Stockman (#Reagan’s Budget Director) #classic (pg 209)
- “He now refers to you as Paul rather than Chairman Volcker” #Reagan understood #StrongDollar tax cuts #commodities (pg 214)
- “I think we’ll re-appoint Paul Volcker for about a year and a half. He doesn’t want a full term” –Reagan #1983 #winning (pg 233)
- “Having 2 or 3 $40B institutions in trouble is a horse of a different color” –Volcker in #1984 as #ContinentalIllinois was imploding (pg 243)
- “Keynesians such as Samuelson said it was impossible, monetarists such as Friedman said Fed was doing wrong” #1985 Volcker right (pg 247)
- “Volcker resigned twice, but only one stuck” post #1985, James #Baker politicized everything all over again #PlazaAccord (pg 252)
- “The role you have played has been invaluable” –Margaret Thatcher on #Volcker #1987 (pg 265)
- “I may be old but I am persistent” –Volcker #2010, #Volcker Rule
- “Foreigners hold Dollars because America has demonstrated fiscal and monetary integrity” #basic, pure #Constitution (pg 298)
An easy read that will educate people on how central planning has become so causal to American Purchasing Power (US Dollar) and inflation/growth expectations.
KM
Keith R. McCullough
Chief Executive Officer