QUESTION: In your Nov. 15 blog you said about the Fed “ I do not think in its present form it should be owned by banks collecting 6%. I would advocate a public float as is the case in Switzerland. Can you explain what that means, and how that works. Thank you

There is a ring of truth to what you say.

Thank you.

ANSWER: The Fed is far more independent than many portray. Its decisions to raise or lower interest rates are not at the direction of bankers, but its understanding that it must steer a realistic path. Yellen has inherited a nightmare. Raised were lowered and the Fed became trapped, They stopped buying 30 year bonds and moved to mortgage securities. It cannot sell anything it now holds. Yellen realized that the pension funds will go belly up and keeps saying the rates must rise to be “normalized”.

The Fed is far too much influenced by politics. We cannot afford a central bank controlled by politicians. Likewise, bankers should not control the Fed if they no longer retain loans on their books and sell them becoming transactional bankers.

The only solution would be that the Fed is floated publicly so anyone can buy shares. The influence of politicians and bankers must come to an end. Banks should NOT be qualified for any bailout on their trading – PERIOD. If they do not retain loans, they are not entitle to use elastic money. Floating the Fed makes it a private corporation that must report its balance sheet like everyone else. Congress MUST be forbidden to order the Fed to do anything. That has been the problem all along. Stimulation should be returned to buying corporate paper, not hand banks cash and hope they lend it out. Enough is enough.