SeaShore's Reviews > Volcker: The Triumph of Persistence

This had an excellent start and continued to be that way but I had to set it aside some times because of it's seriously straightforward writing. I like that: persistence.
William Silber, the author is promising. He also included Volcker's love for Baseball; Dodgers Fan and a fan of player Lou Gehrig. The author also noted that Volcker learned to love fishing especially Bass Fishing from his father.

"Gold has served as a store of value ever since King Tut passed into the afterlife with a treasure chest of the metal, in addition to his famous mask. Gold developed into money something useful for making payments, in part because it is a good store of value. But many things are valuable as the New York Yankees, Buckingham Palace, and French antiques. Gold serve as money because in addition to holding its value, it is easily divisible and standardized." Page 35

In March 1933, President Franklin Roosevelt wanted to allow banks to expand credit without the limitations of gold, to help rescue the economy from the ravages of the Great Depression.

Imagine citizens had to give up their accumulated gold coins in exchange for Federal Reserve notes.

"Loosening the link with gold provided some leeway for the central bank to expand credit during a crisis, such as the Great Depression.
...
The 1934 legislation also devalued the dollar, reducing its gold content to 13.714 grains of pure gold, which translated into the price or $35.00 per ounce rather than $20.67."

When JFK took office in 1961, he assigned Robert Roosa in charge of defending America's gold reserve.
It was a challenging job. Roosa assigned the job of helping him protect the gold stock to Paul Volcker.

The 1934 prohibition against U.S. citizens investing in gold lasted forty years, until 1974 and Vlocker had to prevent gold from entering the country without a proper visa.

"Charles de Gaulle pursued gold the way Henry VIII pursued wives." page 42

Paul Volcker had two children then, Janice was ten and Jimmy seven. The story of Jimmy is fascinating especially the relationship with parents Paul and Barbara. Jimmy was born with cerebral palsy.
Paul got him very interested in baseball.

"On Friday, March 15, 1968, Queen Elizabeth shut down the London gold market in response to an emergency request from President Lyndon Johnson."

By 1969, Paul Volcker now doing Robert Roosa's job and determined to follow his father's path to rescue the country from the financial setbacks "that threatened to diminish America's stature in the world." page 54
May 1972 John Connally announces his resignations secretary of the treasury -and Volcker testifies on the future of the international monetary system saying the reform must have a wide agenda including related issues of trading rules, investment and development -Volcker was disappointed in and displeased with Britain's allowing its currency to float.
Shultz and Volcker shared a commitment to implement a workable solution

page 121
Volcker should have known that Richard Nixon would never appoint him secretary of the treasury. Despite his public status as the president's monetary diplomat, he was not part of the inner circle. Instead Nixon appointed John Connally.

Volcker is at the federal Reserve Bank. Jimmy Carter beat Gerald Ford November 2, 1976. Inflation dropped to 5%; High unemployment and high inflation were two reasons.

Volcker pulled the levers and pressed the buttons that largely determined the flow of money in America. ... He had deliberately orchestrated a stratospheric rise in interest rates ... in a determined campaign to crush inflation. according to author, Joseph B. Treaster

This caused a great uproar, some even declaring that Volcker should be impeached.
In 1987 after 30 years with the Federal Reserve, Volcker stepped down.

Then he went fishing I suppose; a hobby passed ion from his father.


The author details meetings of the Federal Open Market Committee (FOMC) - with Volcker's input on setting targets
In December 1980, Inflation stood at 12% per annum. and the economy had just recovered from a brief recession.
Leading economists across the country were involved in the debate and discussion.
Volcker met with Ronald Reagan on Friday January 23rd, 1981 three days after the inauguration.

No journey is ever smooth and the author points out where Volcker felt disappointments leading up to March 1987, when Volcker made his departure announcement.

This book is good for the person interested in the discussions at meetings concerning the inflation talks. And, of course the ramifications around setting the Volcker Rule*. I liked the handwritten notes, the photographs of the young Volcker and the cartoon, "Repent The End Is Near" on page 334 and Paul Volcker putting President Ronald Reagan on hold (page 332). Acknowledgments and Index are included on the last 120 pages of this 454-page hard cover copy.

If the reader aspires to read a biography of Paul A. Volcker then, Keeping At It: The Quest for Sound Money and Good Government by Paul Volcker, himself is very suitable.



*The Volcker Rule prohibits banks from using their own accounts for short-term proprietary trading of securities, derivatives and commodity futures, as well as options on any of these instruments. The rule also bars banks, or insured depository institutions, from acquiring or retaining ownership interests in hedge funds or private equity funds, subject to certain exemptions. In other words, the rule aims to discourage banks from taking too much risk by barring them from using their own funds to make these types of investments to increase profits. The Volcker Rule relies on the premise that these speculative trading activities do not benefit banks’ customers.

The rule went into effect on April 1, 2014, with banks' full compliance required by July 21, 2015 — although the Federal Reserve has since set procedures for banks to request extended time to transition into full compliance for certain activities and investments. On May 30, 2018, members of the Federal Reserve Board, led by Chairman Jerome (Jay) Powell, voted unanimously to push forward a proposal to loosen the restrictions around the Volcker Rule and reduce the costs for banks that need to comply with it. See Investopaedia.

A 5-star read.