Fed Reserve Chair Jerome Powell's "Whopper"

Above, Federal Reserve Chairman Jerome Powell. 2022 official portrait.

GoldSeek.com posted an article by Mike Gleason of Money Metals Exchange on bank runs and the gyrating rates for gold and silver resulting this past week over the collapse of two banks.

The article quotes an incredible statement by Federal Reserve Chairman Jerome Powell on the U.S. dollar during a discussion of the dollar's status of the world reserve currency.

Here's how that one went:

On Wednesday, Powell spoke before the House Financial Services Committee. He was asked by Republican Congressman Blaine Leutkemeyer about threats posed by Russia and China to the U.S. dollar’s status as world reserve currency. Powell’s response included a whopper about the dollar retaining its value.

Rep. Leutkemeyer: In the wake of Russia's unprovoked invasion of Ukraine, the Fed took action to prevent the Kremlin from accessing more than $300 billion in reserves, roughly half of Russia's reserves. However, this led to an accelerated effort by countries like China to de-dollarize their official foreign exchange reserves. Just last week there was an article in The Wall Street Journal titled Russia Turns to Yuan in an Effort to Ditch the Dollar. Are you concerned about these actions by Russia and China to establish different reserves and conduct transactions in non-U.S. dollars?

Jerome Powell: So, the U.S. dollar is the widely accepted and really the only serious candidate for the world's principal reserve currency, and that's because of our democratic institutions, our liquid markets, the rule of law, and all those kinds of things. And also, the fact that the dollar has held its value over time.

It’s a bit much for Powell to boast about the Federal Reserve note retaining its value at a time when inflation is still raging. For the past two years, the Fed has failed to achieve price stability by its own definition.

Of course, rising prices are a direct consequence of the currency losing value. Since the Fed’s creation in 1913, the U.S. dollar has lost roughly 98% of its purchasing power. Put another way, it has retained only 2% of its value over time.

To read the full article, go here.