Jerome Powell set to become next Fed Chairmain and why that is good news for Cryptocurrency!
Later this afternoon, Donald Trump is scheduled to announce Jerome Powell as the new Fed Chairman.
The Fed Chair is considered by many as the second most powerful position in the United States government.
(behind only the President of the United States)
The role of the Fed Chair is to be the voice of the institution that is tasked with keeping the economy on track.
This change comes at an important time in the country's economic recovery as unemployment is at a 16 year low but wage increases have been mostly stagnant.
Some specifics:
The previous Fed Chair was Janet Yellen.
Donald Trump has chosen to forgo her second term and instead bring in Jerome Powell.
However, even though there is a change, Powell is likely to stay the course of current monetary policy.
The announcement will be made official this afternoon at 3 pm EST at a Rose Garden ceremony.
The change is somewhat interesting because the previous 3 Fed Chair's were reappointed to a second term. This marks the first time that trend has been broken in some time.
Powell's position on things.
In general, Powell is regarded as the G.O.P version of Janet Yellen. Perfectly comfortable continuing her gradual rate of interest rate hikes.
Powell is a lawyer by training and an investment banker by trade.
He has deep roots in the republican party and in the financial industry.
The one area that he differs from Yellen is in his beliefs that Banks need less regulation as opposed to more in order to get our economy growing robustly again.
These were his remarks on the topic:
"The post crisis reform program has been mostly completed and has mostly been successful. I think it's our obligation now, as we reach completion of it, to look back over it and ask what aspects of it may be redundant or inefficient or utterly essential and should be protected down to every letter. But there are going to be some adjustments and I think that's only appropriate."
He is for less regulation, but only if it doesn't cause reckless behavior to run rampant again.
His thoughts on Bitcoin and Cryptocurrency.
Some have called him a bitcoin skeptic, but from watching and listening to him, I just don't see it.
I would say he is neither pro bitcoin, but more importantly, he is also not against it either.
And that is the big one!
Here was his quote on the topic:
"Nothing against bitcoin, nothing against you know, private currencies.… We generally look at some of the risk of cryptocurrencies associated with money laundering and those sorts of issues but we're not broadly opposed or supportive of alternative currencies. I think from a Fed standpoint, I would say I am very cautious on the idea of a Fed digital currency. That's something central banks are generally looking at, but I would say my approach to that would be very, very cautious."
A few very important takeaways from his statement...
#1 - He is not a fan of state backed cryptocurrencies.
That is huge news at a time when several other large countries are working on exactly that.
#2 - He seems to be looking at regulating bitcoin/cryptocurrencies as opposed to banning them.
Again, this is also big news as well in a time when many others are going the banning route.
The most important point in all of this wasn't actually mentioned in that quote above but was mentioned by him in a previous speech.
It has to do with WHY he said he didn't like the idea of a state backed crypto...
According to Powell, he doesn't like the idea of a state backed crypto because he feels like it will hamper technological innovation.
Say what? You mean someone actually gets it?!
That is the most important part in all of this.
His number one reasoning for not wanting to issue Fedcoin of Govcoin or any other state backed crypto is because he thinks it will hamper technological advancements in the private cryptocurrency/blockchain space.
And he is 100% correct!
This guy actually gets it!
I am not sure about you guys but I am pretty excited about this guy taking up this very important position. It removes one of my major fears regarding bitcoin/cryptocurrency and the possibility of central banks all creating their own and outlawing others.
I think this guy just gave confirmation that the odds of that happening in the United States are slim to none.
He's my kind of guy!
Stay informed my friends.
Sources:
https://www.nytimes.com/2017/11/02/business/economy/jerome-powell-federal-reserve-trump.html
All images are courtesy of pixabay.com
Follow me: @jrcornel
Putting much faith in the comments of a central banker, eh? I wouldn't trust anything that comes out of guy's mouth. Remember when Greenspan turned pro-gold after his tenure at the FED? These dudes are absolute scumbags.
Whether him say that than the exact opposite, which he very easily could.
Go Powell. Freedom is precious.
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Yes, that's Well Said @davebrewer :)
Hi @jrcornel Thanks for the update. Indeed a very wise decision. Powell, a Republican, is a compromise pick who will likely gain the approval of both Democrats and Republicans in the Senate. But why all the steemians and cryptocurrency supporters should happy on this news....? Here CNBC says:
Thanks a lot for sharing this wonderful news 1st on steemit. This is a great news for all of us. Keep posting wonderful stuff. Stay Blessed!
I loved that statement about him being very cautious about a central bank issued cryptocurrency. Especially when he stated why...
this is interesting issue that wanted to know what happen overthere, @chiny
We live in a very partisan world. I am much happier with a Fed Chair who is pretty neutral on things than one who is falling all over himself to promote crypto currencies. The other day I learned of a "bi-partisan" bill in congress that would eliminate the capital gains tax on small Bitcoin purchases. I believe under $600. The pundit who was speaking about it referred to it as "little known". To this I thought to myself, fantastic! If it is not on everyone's radar it might just go through. The political parties are so afraid of giving the other side a "win" they will vote down things they may even like, or maybe just not care one way or another about.
The only things congress seems to be able to get done are things that don't "matter". Let hope that this bill matters enough to get voted on, but not enough that either party will think of it as a "win' for their opponents Trump nominates a centrist republican who is non committal on crypto currencies either way. Except when it comes to a national crypto currency. Perfect!
While the Fed Chair is not in congress their opinion will be of value to congress. The best opinion will be one that does not politically weaponized the Bitcoin Issue.
Great comment. I agree completely!
Interesting
Fingers crossed, up for the good news and manage for the best!
@jrcornel, thanks for updating and informative news about the second most powerful man of USA announced the name of Jerome Powell as the new Fed Chairman. hope he do revolutionary policies and actions for betteremnt of economics.i supported that should be better for country.
He's a propagandist. What propagandists say should never be taken at face value. That will be my only comment on this.
As much as I would prefect if the federal reserve was part of the government, it isn't. I get your point nonetheless.
https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks
Govt issued cryptocurrency is a total corruption of the whole premise.
Rather than distributing power, they will concentrate even more power, by giving themselves the ability to monitor everyone's spending, collect taxes automatically, etc. Its a very nice solution to erode privacy, that can masquerade under the facade of stopping money laundering, terrorism, crime.
You better believe that sooner or later they will do it, as it makes perfect sense - see Russia, China already getting the ball rolling. These countries can move quicker due to the more totalitarian nature of their govt/society.
It will be a bitter pill for the crypto-enthusiast minority to swallow, but unfortunately, the vast majority dont give a shit, and will go along with the govt plan, as long as they get fed a nice line about security, peace, prosperity, sleep well at night, blah blah.
However, its not all doom and gloom - if the crop of leading cryptos (looking at you BTC, ETH, XMR, etc.) can keep innovating, there will a place for both decentralised and centralised cryptos, and maybe the decentralised can then work on changing the system from within.
"...but unfortunately, the vast majority dont give a shit"
It's not that they don't give a shit, it's that they don't know how to give a shit. As long as they have enough to pay the bills and possibly buy some cigs and alcohol then they are happy. They will do as their government bids them to do.
He definitely seems more reasonable. All we can do is wait and see. With BTC over $7000 a backlash is surely in the works!