Paul Volcker was born on September 5, 1927 and is currently over 87-years-old. Born in Cape May, NJ, Volcker served as Chairman of the Federal Reserve under the presidencies of Jimmy Carter and Ronald Reagan, which lasted about 7 years, from 1979 to 1987.
By having served so long as the head of such a powerful institution, the heart of the financial world in the U.S. per say, we can know right on the spot that Paul Volcker is an echoer of the ideals defended by those very presidents he served under. But not only that, he presents no disrupting ideas to the current status quo and seeks just to maintain a low profile parroting the dictations that come from the top branches of any institution he works for.
While participating in a media session in Washington, D.C. at the World Bank Headquarters ahead of the Bretton Woods Committee annual meeting on May 21st, Volcker made some striking remarks about what his beliefs are, and showed that he has not changed a bit. Once asked about what topics Volcker would prefer to discuss at this new conference he said that he would prefer to talk about a New Bretton Woods.
Volcker praised how Bretton Woods was a major institution that influenced and dominated policies creation and implementation in Treasury when he was a junior official there. He states that it was this cause that allowed him to later on be able to control inflation during his time as chairman of the organization for seven years.
Volcker believes that the Bretton Woods monetary system of control should be rebuilt. That instead of allowing a regime of free floating exchange rates, that these should be regulated by orderly movements in exchange rates, which would serve to settle the differences among economic policies and national financial ones.
Volcker states that the advent of the financial crisis and later stagflation in the U.S. during the 70’s and the financial crisis that loomed the Latin countries later on in the 80’s, was the direct result of the lack of an official monetary center that would manage on a rules-based cooperative process, all monetary system.
In other words, Paul Volcker believes that there should be the centralization of the monetary policies around the world, that the financial institutions around the world along with the countries’ central banks, the World Bank, the IMF and BIS should be all regulated by a centralized institution that would oversee the whole of the world economy.
Volcker’s statements were felt by many as radical and disruptive in their context. Instead of breaking free from the traditional monetary policies that seem to have caused the current financial crisis scenarios around the world in first place, he seeks to try to reform and revitalize them.
In other words, he’s parroting out the ideals of the powers to be, the lobbyists in Congress and the major financial institutions and banks. He serves as a spokesperson for them in that he lifts smoking mirrors around the financial system and the people in general still do not realize much about what is happening financially in the world right.
Opinion by Bruno Silva