 Federal Reserve interesting stuff happening on that front because Trump is about to announce his choice for for the chairman of the Federal Reserve a very powerful position Maybe the most powerful economic position in the United States and possibly Possibly the world more more powerful. I think than Treasury Secretary or the chief economic advisor to the president And we've got a number of different competitors for the wall We've got Janet Yellen who is the current chairman of the Federal Reserve we've got Jerome Powell who is one of the Fed governors who's on the board that makes these kind of decisions already and has been there in a while Oh, wow with a Gary Cohen who is a chief economic advisor to the president and was the frontrunner for this position until he criticized Trump Gary Gary you can't criticize Trump If you want to advance in life It's wrong look look at me, right? I criticize Trump and Anyway, you can't do it. You can't do it. Trump is a narcissist and he does not tolerate criticism from anyone media his own colleagues his own friends his Anybody you cannot criticize him. So you you messed up. So I don't think Gary's gonna get it Kevin Walsh who is a former Fed governor. He was a Fed governor under Bernanke and he was there during the financial crisis and was responsible for everything the Fed did during the financial crisis So, uh, so Kevin Walsh is another and then I think the most interesting Possibility is is John Taylor John Taylor is a Stanford economist Generally a free market guy. None of these other people I would call them free market guys. They were all either Economic statists they believe the same central planning or they are cronies I would consider Walsh, Cone and Powell Cronies and I would consider yelling. Well yelling and Powell are clear statists And John Taylor is the only one who's a free market guy and this is why I Truly believe John Taylor is not gonna get the job. Now. It's not just that and I'm gonna get a little technical on you here So but bear with me again You listen to your own book show not just to hear me yelling and inspiring but also to get educated because you're not gonna hear this stuff anywhere else The Federal Reserve is the most powerful economic institution in the world It basically controls the money supply of the United States. It prints the money it determines interest rates it determines the quantity of money in the economy and The interest rate charged on money at least on the short-term rate in the economy It has massive ability to distort the US economy for example by buying financial assets or selling financial asset That's by the way how it expands or shrinks the amount of money in the economy as most of you know The Federal Reserve bought about four and a half Trillion that's with a T trillion. That's a thousand billion Which is a million millions so four million millions of Various financial instruments primarily bonds and mortgage-backed securities and by doing that expanded Nominally expanded the money supply by four trillion. The funny thing is at the same time Those four trillion were put by the banks into reserve at the Fed So really in terms of circulating money 90 not much really changed and not much really expanded Anyway, the Fed has this incredible discretionary power. It doesn't really report to anybody It's an independent institution government institution But you know, you can impeach the Federal Reserve chairman, but other than that he's pretty autonomous But Anki almost all Fed chairman have had since the Great Depression since 1933 They've had complete autonomy in terms of what they do one minute They weren't bound by any rules or by any standards or by any restrictions or by any constraints and That's what What one two three four of the five nominees would like to continue The advantage that the thing John Taylor is different the way John Taylor is different is he would like to constrain the Fed He would like to constrain its ability to move interest rates To either print money 30 or extract money from the economy And that's what makes them interesting. So when we come back We're gonna talk more about what John Taylor wants to do about the Taylor rule What these others would do and what I would suggest in terms of the Fed and maybe talk about the inherent inherent problem With the very existence of the Federal Reserve. All right, you're listening to your own book show on the blaze radio network We'll be back after these messages The Iran Brooks show All right, this is your own book. We're talking about the Federal Reserve and You know Trump is gonna have to make a choice here about nominating a new fit chairman Now if I had to guess right now, this is my prediction You can call me on it, but my prediction is he's gonna go with Yellen. Why Yellen? Cuz he knows her He doesn't want anybody new who might stand up to him. God forbid who might criticize him. God forbid So he's gonna go with the known quantity Yellen's a known quantity I also think Donald Trump is a real estate guy. He wants low interest rates He doesn't really care about much and his understanding in economics is Superficial at best It's it's very bad and Yellen's gonna keep is she's a dove She's gonna keep interest rates low for as long as you can he might go with somebody like your own power Hello, Gary Cohen who are gonna do the same thing. I'm pretty sure you won't go with Kevin Walsh Kevin Walsh is too much of a of a loose cannon I think and and too much of a Republican and you know Yellen pow Cohen all Democrats. I think that's where Donald Trump's heart really is it's in the Democratic Party when it comes to economic issues and and I suspect he's gonna go with one of them easiest safest Appointment would be to point Janet Yellen. I If I could influence the decision which again I would love to see John Taylor in the wall because John Taylor has a view somewhat at least to some extent of limited government and also limiting the power of the Fed and Limiting the power of the Fed in terms of its discretion in terms of what it does So he would have a rule an equation if you will I'm not a huge fan of the rule, but better than nothing A rule that that is predictable that the markets know about how monetary policy would would move over time and It would not be at the discretion of some bunch of economists who come up with some bunch of economic theories and It would be one equation basically and the markets would know and they would adjust and while I think it's far far from optimal It's it's better. He now Would John Taylor stick to the Taylor rule if he got into power? Unfortunately, I think he wouldn't I mean, this is the problem with the Federal Reserve. It's a political institution and they always succumb to political pressure So this is my bottom line The only solution to Federal Reserve is to do away with it. I think the Federal Reserve is a horrible Institution I would like to do away with it and I would like to do away with the government having any control over money or interest rates I'd like to pass that responsibility over to the public private sector I'd like to give banks the responsibility of issuing currency based on Some reserve that they have like gold and then interest rates would be determined purely by the market. There would be no No government set interest rates think about it this way Central planning doesn't work when government sets prices you either have They either set it too high or too low the only proper Price is a market price. It's the price. We're supplying demand clear It's the price that Integrates our values what we care about Imagine if the government set the price of an iPhone. I mean it would completely distort The whole supply chain of the iPhone and destroy Apple and and either make the iPhone too expensive Which is what it would probably do or it would make it so cheap Apple would stop producing it So we'd even have shortages or surpluses because it was too expensive. Nobody would want to buy it No, we know this doesn't work because the Soviet Union experiment and prices of bread and what you had is shortages and surpluses And it was just a disaster every time price controls by the government Nixon tried this in the 70s Every time government tries to impose price controls. It messes it up. It screws it up completely But We take the most important price in the entire economy by the way the most important price in the entire economy is interest rates because every economic decision relies on some estimate on some projection of interest rates Everything every every product you have out there is impacted its value is impacted by interest rates in the economy So we take interest rates the most important price in the entire economy and We centrally plan that we let the government determine that through the Federal Reserve. We take money Maybe the most important product in the entire economy because we use it To purchase every other product we use it to save we use it to invest and we give the government a monopoly over its distribution over its creation and distribution How ridiculous is that? We don't believe in government monopolies Well, I guess we do we have a government basically monopoly over education. We're working towards a government monopoly over health care They still have first-class mail. They have a monopoly over we can never destroy government monopolies. It seems but they don't work and They suddenly don't work when it comes to money and interest rates. All they do is distort and destroy the economy So nobody not John Taylor not Alan Greenspan not Ben Bernanke Not Janet Yellen can determine the right interest rates only markets can do that and in trying to do it All they do is set us up for failure Alan Greenspan's interest rate policy set us up for the Great Recession Interstate policy during the 1920s set us up for the Great Depression Interest rates during the 1930s set up the continuation of the Great Depression the Federal Reserve has been an Unmitigated disaster since its founding and and there's a lot more I could say about this But we are a little short in time here So I'll just say this it doesn't at the end of the day doesn't really matter who Trump But I think it'll tell us a lot about Trump's personality If if he appoints John Taylor That would you know that would be one of the better things he's done if he does that just because I think John Taylor could be more Independent, but he'll probably appoint some lackey Cohen Powell or Yellen and That'll tell you a lot about Donald Trump That'll tell you a lot of not that you need to know a lot more about Donald Trump I think we already know all we need to know about him