As President Obama prepares for the G20 summit in South Korea this week, Sarah Palin is challenging the Federal Reserve’s monetary policy, which will likely be a key issue at the talks. On Monday, in a keynote address at a trade-association convention in Phoenix.
Governor Palin’s Prepared Remarks::
I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds. And where, you may ask, are we getting the money to pay for all this? We’re printing it out of thin air. […]
And if it doesn’t work, what do we do then? Print even more money? What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort? […]
Oil recently hit a six month high, at more than $87 a barrel. The weak dollar – a direct result of the Fed’s decision to dump more dollars onto the market – is pushing oil prices upwards. That’s like an extra tax on earnings. And the worst part of it: because the Obama White House refuses to open up our offshore and onshore oil reserves for exploration, most of that money will go directly to foreign regimes who don’t have America’s best interests at heart.
We shouldn’t be playing around with inflation. It’s not for nothing Reagan called it “as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” The Fed’s pump priming addiction has got our small businesses running scared, and our allies worried. The German finance minister called the Fed’s proposals “clueless.” […]
We want a stable dollar combined with real economic reform. It’s the only way we can get our economy back on the right track.
One of the questions in respect of 2012 is how it has happened that the only major Republican figure, aside from Congressman Ron Paul, to stand up and be counted on the dollar is Sarah Palin. She is supposed to be an ex-beauty queen without a lot of sophistication. […]
Her posting, we wrote, suggested that she was ahead of the rest of the undeclared contenders for 2012.
So far the Congress that has oversight of the Federal Reserve has been largely mute, though there have been some notable exceptions (Congressman Paul Ryan, for example, and Dr. Ron Paul, of course; among the big newspapers, only the editorial page of the Wall Street Journal has been in front of this issue). […]
Mrs. Palin is looking over the horizon: “Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually — inevitably — no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?” She comprehends how it is going to get to the voters she’ll be courting. […]
In other words, she is reasoning out a coherent economic and geopolitical argument that she and her party — Tea, if not the mainstream GOP — can take to the voters.... So as we asked at the outset of this editorial, how has it happened that she is the first to brand this issue?
Was it her time running a state whose economy is tied to oil, which often tracks gold? Is it that she can see Russia from her door? Is she just smarter than the other candidates?....No matter, she is now out in front of yet another issue as there is about to convene a new Congress of the United States in which she has a brace of allies indebted to her for her help in getting elected. Mr. Bernanke seems to have blithely ignored his other critics, but it will be more dangerous to ignore the Mamma Grizzly.
Those of us who have been waiting for a politician to pick up on the monetary issue are perking up at Governor Palin’s demarche on the dollar. This came last week in a posting on her Facebook page, where she reacted to a report that Gulf oil producers were negotiating with Russia, China, Japan, and France to abandon the use of the dollar in pricing petroleum. She noted the report in the Wall Street Journal that Arab oil officials were denying the story, but reckoned that “even the possibility of such talk weakens the dollar and renews fears about its continued viability as an international reserve currency.” Then she pointed out that “a United Nations official called for a new global reserve currency to replace the dollar and end our ‘privilege’ to run up huge deficits.” Most importantly, she warned about the price of gold, which that day had hit a record in what she called a “response to fears about the weakened dollar.”
Time will tell, but what this suggests is that the former governor of Alaska is ahead of the rest of the undeclared contenders in 2012. The last president to run an avowedly weak dollar policy was Jimmy Carter. […]
So Mrs. Palin’s comments suggest she’s savvier than many give her credit for being. No sooner did she issue her warning about the dollar than Reuters found a number of Republicans declaring she was right....It is true that the only politician who has been campaigning on this issue, Ron Paul, failed to prosper at the polls....We’re not ready to make endorsements, but Palin and Paul could make a whale of a ticket.
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