# Trump to put nut on fed reserve board **URL:** \ **Category:** Politics & Elections\ **Created:** [November 16, 2020, 8:48pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738 "2020-11-16T20:48:50Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Bijou\_Drains](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bijou_drains/32/2814_2.png) [@Bijou\_Drains](https://boards.straightdope.com/u/Bijou_Drains)\ **Post date:** [November 16, 2020, 8:48pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/1 "2020-11-16T20:48:51Z")
She was nominated a while back and just now will be OKd Probably see a lot more of this in the next 2 months. > **[Controversial Fed Nominee Set To Prevail In Senate Confirmation Vote This Week](https://www.npr.org/2020/11/16/934553035/controversial-fed-nominee-set-to-prevail-in-senate-confirmation-vote-this-week)** > > The Senate is expected to vote this week on the controversial nomination of Judy Shelton to the Federal Reserve's governing board. She appears to have support from a slim majority of senators. ---
**Author:** ![Dark\_Sponge](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dark_sponge/32/121_2.png) [@Dark\_Sponge](https://boards.straightdope.com/u/Dark_Sponge)\ **Post date:** [November 16, 2020, 10:00pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/2 "2020-11-16T22:00:14Z")
Which part makes her a nut? Wanting to go back to the gold standard? Wanting to kill the Federal Reserve Bank? Something else? ---
**Author:** ![Skywatcher](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skywatcher/32/254_2.png) [@Skywatcher](https://boards.straightdope.com/u/Skywatcher)\ **Post date:** [November 16, 2020, 10:02pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/3 "2020-11-16T22:02:02Z")
> [@Bijou\_Drains](#): > > She was nominated a while back and just now will be OKd Maybe not… > **[Third Republican comes out against Shelton for Fed seat, complicating nomination](https://www.cnbc.com/2020/11/16/third-republican-comes-out-against-judy-shelton-for-fed-seat.html)** > > Sen. Lamar Alexander said he will oppose President Donald Trump's nomination of Shelton as a Fed governor. ---
**Author:** ![RyanAdam](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@RyanAdam](https://boards.straightdope.com/u/RyanAdam)\ **Post date:** [November 16, 2020, 10:02pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/4 "2020-11-16T22:02:54Z")
Oh God. This idiocy is why I can’t remaina Republican any more. I really thought she’d be quietly dumped. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [November 16, 2020, 10:04pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/5 "2020-11-16T22:04:10Z")
> [@Dark\_Sponge](#): > > Wanting to go back to the gold standard? Pretty much, yes. The gold standard is total nutjobbery for a modern central bank. ---
**Author:** ![Dark\_Sponge](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dark_sponge/32/121_2.png) [@Dark\_Sponge](https://boards.straightdope.com/u/Dark_Sponge)\ **Post date:** [November 16, 2020, 10:14pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/6 "2020-11-16T22:14:24Z")
I agree it’s an idea which has been dismissed by modern economics but I find the idea of making the USA’s money supply static (or semi-static) interesting. Could anything good come out of it? I admit I was shocked when I learned banks were solely responsible for “creating new money” in college economics. Presumably the change would slow inflation. What would be the big negative to moving to a static money supply? ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [November 16, 2020, 10:20pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/7 "2020-11-16T22:20:55Z")
Well, the obvious things are that neither the size of the population nor the size of the economy are static. The value of a currency should be related to the productivity of the economy, not some shiny metal. Second, inflation is already too low, and this could cause massive deflation. One of the problems with deflation is that it’s a disincentive to spend, and the US economy is based on producing and buying stuff. If there’s deflation, the thing I want to buy will be cheaper in a few weeks or months, so I put off the purchase, which puts people out of jobs, which causes a further drop in consumerism, which causes further deflation, and then you have a liquidity trap. Inflation hasn’t been an issue really in 40 years, and for the last 12 or 13 (in the US, much longer in Japan) the lack of inflation is the issue. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [November 16, 2020, 10:22pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/8 "2020-11-16T22:22:02Z")
**Trump to put nut on fed reserve board** … and when you’re President, they just let you do it! ---
**Author:** ![RyanAdam](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@RyanAdam](https://boards.straightdope.com/u/RyanAdam)\ **Post date:** [November 16, 2020, 10:38pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/9 "2020-11-16T22:38:10Z")
Inflation is already too low. And the Great Depression is pretty much your guide to why Gold Standard is colossal stupidity. And banks are not solely creating new money, you misunderstood. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [November 16, 2020, 10:43pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/10 "2020-11-16T22:43:49Z")
> [@Dark\_Sponge](#): > > Presumably the change would slow inflation. Well, it probably slows inflation. What it really does is tie inflation to the state of gold extraction technology/political realities in the whole world. Which is really dumb! The point of a central bank is that you want to _control_ the money supply to accomplish policy goals like employment and stable (or at least predictable) long term behavior. > [@](#): > > What would be the big negative to moving to a static money supply? Deflationary spirals are pretty bad for human thriving. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [November 16, 2020, 10:50pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/11 "2020-11-16T22:50:11Z")
Going back to the Gold Standard would only help those who currently own gold. They would become colossally wealthy overnight as the rest of the economy crumbled into rubble. ---
**Author:** ![lum\_s\_husband](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lum_s_husband/32/3698_2.png) [@lum\_s\_husband](https://boards.straightdope.com/u/lum_s_husband)\ **Post date:** [November 16, 2020, 11:49pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/12 "2020-11-16T23:49:42Z")
So no downside? ---
**Author:** ![Dark\_Sponge](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dark_sponge/32/121_2.png) [@Dark\_Sponge](https://boards.straightdope.com/u/Dark_Sponge)\ **Post date:** [November 16, 2020, 11:55pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/13 "2020-11-16T23:55:01Z")
> [@RyanAdam](#): > > …And banks are not solely creating new money, you misunderstood. Admittedly, I stopped after macro and micro economics and probably forgot most of it. My impression was the vast majority, if not all, of new money is created by banks loaning more money than they have. What are the other methods? ---
**Author:** ![Skywatcher](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skywatcher/32/254_2.png) [@Skywatcher](https://boards.straightdope.com/u/Skywatcher)\ **Post date:** [November 17, 2020, 2:11am UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/14 "2020-11-17T02:11:14Z")
> [@Whack-a-Mole](#): > > Going back to the Gold Standard would only help those who currently own gold. They would become colossally wealthy overnight as the rest of the economy crumbled into rubble. Gold is already overpriced to the point where hobbyist jewelers are having to stop practicing their hobby. I personally know one who had been making & selling jewelry for some 30 years. Her manufacturing job does not pay enough for her to continue the side job. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [November 17, 2020, 3:01am UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/15 "2020-11-17T03:01:29Z")
It’s foolish to tie the entire economy to any one commodity. That’s why we’re currently on the Everything Standard. US dollars are backed by gold… and silver, and tungsten, and Big Macs, and Netflix subscriptions, and by every other commodity in the world. If I have dollars, I can get any of those things, and therefore dollars have a stable value. ---
**Author:** ![simster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/simster/32/1047_2.png) [@simster](https://boards.straightdope.com/u/simster)\ **Post date:** [November 17, 2020, 3:45am UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/16 "2020-11-17T03:45:51Z")
I am genuinely curious - what steps (procedurally, legislatively,etc) would have to be followed in order to put us ‘back on the gold standard’. My impression is that this is beyond just who is ‘in charge of the fed’ and even the President can’t simply order it - So - what would it take? Congress? Senate? standard Bill procedures? ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [November 17, 2020, 3:02pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/17 "2020-11-17T15:02:59Z")
> [@simster](#): > > even the President can’t simply order it I thought Nixon single-handedly took us off the gold standard. The Fed actually controls the money supply – banks help, but the Fed tells banks how much they can lend out based on how much capital they have, and the Fed can create money by purchasing US Treasuries and other securities. So, if the Fed decided to keep the money supply tied to how much gold the US has, they could probably do it, I think. That’s not the issue here, of course. The issue is that Judy Shelton is a delusional nutjob who apparently doesn’t understand economics if she’s a gold bug. ---
**Author:** ![simster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/simster/32/1047_2.png) [@simster](https://boards.straightdope.com/u/simster)\ **Post date:** [November 17, 2020, 3:08pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/18 "2020-11-17T15:08:36Z")
[https://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard](https://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard) (assuming its correct) - FDR took us off the standard, Nixon completed it. Looks like Congress was involved there. But the question isn’t so much what it took to take us off - but what it would take to put us back on? ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [November 17, 2020, 3:12pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/19 "2020-11-17T15:12:11Z")
Since the Fed controls the money supply, they could choose to limit it to some amount based on the amount of gold, right? Seems like they could do it unilaterally. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [November 17, 2020, 3:26pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/20 "2020-11-17T15:26:05Z")
> [@simster](#): > > But the question isn’t so much what it took to take us off - but what it would take to put us back on? There’s officially back on and unofficially back on. Those would be different in both process and in effect. > [@RitterSport](#): > > Since the Fed controls the money supply, they could choose to limit it to some amount based on the amount of gold, right? Seems like they could do it unilaterally. Perhaps. IANA expert, but by statute the Fed has certain responsibilities to work their policy levers to achieve certain economic goals. As you rightly suggest, they _could_ elect to track the money supply alongside gold as a _de facto_ gold standard. But only insofar as that policy doesn’t cause them to fail too badly at their statutory responsibilities. Which, IMO, it would pretty quickly. As well, if they did announce “we’re now gold bugs”, that might well provoke a response from Congress and / or the Executive altering those statutory responsibilities. The Fed _is_ independent. That doesn’t mean they’re a law unto themselves answerable to no one. Lastly, the economic effectiveness of whatever any central bank does is heavily conditioned on something the experts call “credibility”. Trillions of dollars, euros, etc., are bet every day on predictions / hunches about whether and when any given policy will be amended or reversed. The Fed choosing to adopt a gold-ish standard-ish voluntarily will lead to lots of speculation about how durable that policy stance will be. “Speculation” both in the sense of talking heads yakking and in the sense of financial bets placed. It also depends on how much money can be made how quickly by forcing the bank to backtrack. See **[Britain’s ejection from the ERM](https://en.wikipedia.org/wiki/Black_Wednesday)** for an example of the markets calling the central bank’s bluff to the bank’s = country’s detriment. [Next page](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738.md?page=2)