Transcripts

"Two Ways to Play" -Kevin Depew of Minyanville

SUZANNE PRATT: An independent Federal Reserve versus a central bank that is more transparent. Tonight's "Two Ways to Play" has two takes on the issue. Here's Kevin Depew of Minyanville and Minyanville's Kevin Depew.

KEVIN DEPEW, MINYANVILLE.COM: Federal Reserve Chairman Ben Bernanke was on Capitol Hill earlier this week, mainly to discuss the economy, but also to stop a misguided legislative proposal from Texas Representative Ron Paul to audit the central bank. Here's the thing, the Fed isn't some secretive, nefarious organization. It's already audited. Its balance sheet is published every week. And market-watchers pore over the minutes of every Fed meeting. So what Bernanke rightly opposes is congressional meddling in monetary policy. It is critical for the Fed to maintain its independence, far away from politicians. In order to understand why the Federal Reserve is so opposed to transparency, you have to go back and consider what gives the Fed its power in the first place. If someone offers to give you a weird piece of paper for your watch, you'd probably laugh. But if hundreds of millions people are somehow convinced to accept that weird paper, well, then it's game on. The authority of the Federal Reserve basically exists because it exists, and any threat to it undermines the weird circular logic keeping the confidence game afloat. It would be like that time when you were a kid and you first figured out how to load a Pez dispenser. It ruined everything.