Gold and silver have worst day in decades.

Photo above - Estee Lauder heiress Jane Lauder, with a $2 billion net worth. Standing next to her is little-known future Fed Chairman Kevin Warsh.

Gold bugs have declared “Warsh” on precious metals! Presumptive Fed chairman Kevin Warsh will fix everything which was making people hoard gold and silver? Gold drops 11% yesterday. Silver drops 30% (see link below).

Okay I’d never heard the name Kevin Warsh before this week. Now he’s apparently on track to be the next Federal Reserve chairman. Turns out the guy has credentials out the wazoo: Stanford University. Harvard Law. MIT. Managing director at Morgan Stanley. Member of National Economic Council. His current day job is “distinguished visiting fellow” at Stanford University. Okay . . . I’m sold. Let’s remove Trump, and make Warsh our America's next president.

But why the immediate enthusiasm for the new Fed pick? I’m sure Professor Warsh has a plethora of Instagram posts bemoaning the national debt, and the fact that a Subway $5 footlong now costs $11.95. But current Fed Chairman Jerome “Jay” Powell has also come out in favor of balanced budgets and apple pie. So what stopped Powell from fixing everything?

Despite all the dissing and moaning, it turns out the Federal Reserve has a limited toolkit to tackle these things. Just one, in fact. A hammer. Raising interest rates if you think that too many people are buying too much stuff. If you choke off factory construction and throw people out of work, consumption goes down. People also have their cars repo’d and get evicted. More than half the nation lives paycheck to paycheck.

So, I’m encouraged about Warsh’s credentials. But skeptical that he has a secret plan which have gold bugs scattering for cover. And anyway, Jerome Powell hasn’t even been fired yet. He’s still under virtual house arrest for going over budget on the Fed renovation project. Pretty much the same as Trump is doing with the “worlds largest ballroom” annex being built where the White House Rose Garden used to be.

Come to think of it – going over budget on Fed Headquarters renos, White House renos, and every other fricking thing is the root of all our budget problems. Suppose NOBODY can fix this?

I’m just sayin' . . .

https://www.msn.com/en-us/money/markets/gold-and-silver-plunge-in-worst-day-since-1980/ar-AA1VlYQE?ocid=msedgntp&pc=HCTS&cvid=697e03686676485ebf8e81dd4921831f&ei=76

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SunshineGirl · 36-40, F

He was once a renowned fiscal hawk who eccentrically opposed cutting interest rates during the 2007-9 crisis, lest it stoke inflation (there was absolutely no chance of that happening). An interesting choice.

Powell is likely to remain on the Board and of course the chairman's vote is only one of seven, thank goodness.

SusanInFlorida · 31-35, F

@SunshineGirl since trump is desperate for lower interest rates (its the entire basis of his beef with Powell) it would seem strange to nominate someone who wants higher interest rates, no?

in hindsight, reducing interest rates to near zero during the 2008 housing crisis - and keeping them there for 15 years - was probably not a wise use of fed power.

SunshineGirl · 36-40, F

@SusanInFlorida Exactly, he was not the most obvious of the short list. Perhaps he has undergone a Damascene conversion.

The housing bubble had already burst. Lower interest rates were used to stimulate economies. Unfortunately some businesses and homeowners became addicted to this unusual period in history and assumed interest rates would remain effectively zero forever . . .

SusanInFlorida · 31-35, F

@SunshineGirl upvoted. although (as a matter of principle) i favor moderate lending rates, i don't endorse either price controls on bank lending or the Fed keeping rates near zero for decades. How to allow market based pricing/realities into the equation is a tricky problem.

if you tap the average politician (or federal reserve governor) on the shoulder and ask "what's your job involve?" eventually they will mention "preventing recessions and corporate bankruptcies"

but recessions and bankruptcies are how the economic world cleanses itself of failing components. if we try to prevent all economic corrections and save every bank and automaker we're going to become another failure like the soviet union or venezuela.