What can ever replace him?
My friend Buck passed away and I feel terrible that I cannot determine the exact time and date of his passing. Most of the world is unaware he is gone and I have heard there are some who claim he is still with us. Was Buck a friend? Yes. Could every man relate to Buck? Absolutely.
Admittedly, Buck’s past was a little checkered. His ancestors were not always considered savory. His great uncle, x3, the Continental, was roundly dissed. This uncle was considered worthless, without backing and susceptible to being copied.
Buck’s more recent ancestors were numerous, and from 1793 to 1861, his forbearers were printed and circulated by numerous private banks at the state level. Buck’s ancestral history can be found in a nifty publication: History of United States Currency.
Buck’s family crest, $, was adopted in 1785. In 1791, Buck got his permanent ancestral home when his great, great, great godfather, Al Hamilton, established the first U.S. bank. The Buck most of us know and love, the first paper currency from the U.S. Treasury, was finally born in 1861. While he changed his look over the years, everyone wanted to be his friend, to have more of him. Everyone desired his presence, to be more than close. Time passed, and as banks started making credit available to Buck’s admirers, desire for Buck continued to grow.
Why was Buck so popular? He enhanced the lives of those who possessed him. Spending time with Buck was mostly satisfying, as was spending a little time with him. When Buck came into your presence, it was rewarding. You know Buck was as solid as a rock, always hanging around with his longtime partner, Gold.
Buck had rough spots throughout his life, but many old timers say that Buck’s demise started around 1972, when Buck was separated from Gold. Many wondered what would happen to Buck, but he was tough and seemed to have survived the separation. In more private moments, however, Buck would confide to me that he felt less valuable after his separation from Gold, felt like he was becoming worth less.
Years passed and Buck’s reputation grew. He was the official currency of the world’s strongest economy. Everyone wanted him and he was invited into banking systems the world over. Buck began to feel more confident, that he could be everyone’s best friend, anywhere in the world. His admirers always compared him to his cousins Peso, Yen and Ruble. Buck always was given a seat at the head of the table.
So, what finally happened to Buck? As I become more acquainted with Buck, I noticed that he started to seem thinner, somehow more “stretched.” It depends upon with whom you speak, but I believe that Buck’s boyhood competitor, Inflation, finally got the best of Buck. Some will disagree with me and for those who do, I’ll refer you to 1945.com’s Desmond Lachman. Lachman, in an excellent article, chronicles the differing opinions about Inflation from a former and current U.S. Chairman of the Federal Reserve.
Inflation is also a worry:
From a Friedmannian perspective, among the more striking characteristics of the Powell Fed is its seeming total disregard for the way in which its policies are causing a U.S. money supply explosion. In particular, the Fed seems to be unfazed by the fact that over the past year the Fed’s highly aggressive bond-buying program has contributed to a 30 percent increase in the broad money supply. That is the fastest pace of U.S. money supply increase in the past sixty years by a multiple of around 3.
For Milton Friedman, such a money supply explosion would be a sure sign that inflation was around the corner, especially if the Fed were to continue to finance the U.S. government’s largest budget deficit in peacetime history by printing yet more money. By contrast, for Jerome Powell, who expects inflation to remain well contained, the unusually rapid money supply increase seems to have no real meaning.
Another surprising aspect of the Fed’s current policy mindset is its determination to wait until it sees very clear signs of inflation before starting to even think about raising interest rates or tapering its $120 billion a month bond-buying program. Never mind Milton Friedman’s warnings that monetary policy acts with long and variable lags. The Fed in its wisdom seems to think that nowadays inflation can be turned around on a dime and that there is no policy need to anticipate inflation from a likely economic overheating until actual inflation comes knocking at your door.
All of this does not bode well for the U.S. economic and financial market outlook.
So there you have it – my perhaps premature eulogy for Buck. Some will say, ‘Hey Richard Edward, Buck’s still around, he just doesn’t buy as much as he used to… and dude, even if Buck is a little weaker than he used to be, his cousin Benjamin is still here.’ I don’t know much about that. Benjamin was always running with a much higher dollar crowd than my own, so I haven’t seen him for quite some time.
Those who disagree with me also say ‘Richard Edward has family members living on fixed incomes, so he is just obsessed over the possibility of inflation making his dollars’ worth less, even worthless.’ Who knows, maybe they’re right?
If you think Richard Edward is overly concerned with inflation becoming an American Crisis, please leave a comment below and share your thoughts.
— Richard Edward Tracy