"Jawbone of an Ass"

If Samson could use the jawbone of an ass to slay a thousand men, how come the Federal Reserve can't jawbone a few banks into fixing their interest rate the right way? After all, the Fed has a lot of experience in the jawboning line. That's what it does for a living.

... Who is the jawbone here, and who is the ass? Or to put it another way, what is the difference between, on the one hand, the kind of rate setting done by Barclays and the others involved in the London Interbank Offer Rate, and, on the other hand, the kind of rate setting that is done by the Federal Reserve?

This reminds us of how the Fed didn't use its statutory or "bully" authority to rein in subprime and other marginal mortgage lending in the bubble, either. The stark truth is that the Fed, as with most central bankers, sundry financial regulators and governments in general, is actually complicit in the con that our financial system as turned into.

At any rate, we are happy to see the following outside-the-box thinking by way of solutions in the Sun article:

Our own prediction is that out of this debacle will come greater impetus to monetary reform and the introduction into the conduct of monetary policy of a reference to gold. This may be done through the kind of legislation being advanced by Congressman Ron Paul in the Free Competition in Currencies Act, which would end legal tender laws altogether in the United States and open the monetary sphere to the introduction of privately coined and printed money. It might involve the establishment of the kind of classical gold standard being advanced by, among others, the American Principles Project and Lewis Lerhman.