Yesterday the Brookings Institution in Washington, where former Federal
Reserve Chairman Ben Bernanke is a "distinguished fellow in
residence," posted his essay about what sustains the U.S. dollar as the
primary world reserve currency. Bernanke's commentary was headlined "The
Dollar's International Role: An 'Exorbitant Privilege'?" and it is
posted here:
http://www.brookings.edu/blogs/ben-bernanke/p...-dollar-inte...
Bernanke's commentary offered four explanations for the dollar's primacy
as the world reserve currency: the dollar's stable value, the liquidity of
U.S. financial markets and the market for U.S. Treasury securities, the
safety of dollar assets and particularly the safety of U.S. Treasury
securities, and the Federal Reserve's functioning as the lender of last
resort.
But might there be another factor -- specifically, largely surreptitious
manipulation of markets by the U.S. government and intermediary agents?
Bernanke's page at the Brookings Institution's Internet site provides for
the posting of reply comments, so your secretary/treasurer submitted the
following comment at the bottom of his essay:
"Does the Fed or any other agency of the U.S. government intervene in
markets, directly or indirectly, in ways not clearly announced? If so, what
are those ways and their objectives?
"More specifically:
"-- Are central banks or governments trading the gold market and
related markets surreptitiously, directly or through intermediaries?
"-- If central banks or governments are in the gold market
surreptitiously, is it just for fun -- for example, to see which central
bank's trading desk can make the most money by cheating the most investors --
or is it for policy purposes?
"-- If central banks or governments are in the gold market for
policy purposes, are these the traditional purposes of defeating a
potentially competitive world reserve currency, or have these purposes
expanded?
"-- If central banks and governments, creators of infinite money, are
surreptitiously trading a market, how can it be considered a market at all,
and how can any country or the world ever enjoy a market economy again?
"Will you comment on the documentation of such surreptitious
intervention that is posted here?:
"http://www.gata.org/node/14839"
The Brookings Institution's reply mechanism captured your
secretary/treasurer's name and e-mail address and acknowledged receipt of the
reply. But 24 hours later the reply has not been appended to Bernanke's
essay.
At the bottom of Bernanke's essay the Brookings Institution says:
"Comments are welcome, but because of the volume, we only post selected
comments."
As of 12:41 p.m. Eastern time today, the "volume" of posted
comments is ... zero.
Is no one in the whole world interested in an exchange with the former
chairman of the Fed even though he ordinarily commands hundreds of thousands
of dollars for private appearances with financial houses?
Or is the former chairman of the Fed not interested in responding in
public when honest answers might expose the conventional economic wisdom as
mere pretense and a joke?
