Watch John Taylor stumble on the question of gold in a Q&A session, even if he has had plenty to say about it in his own writing…
Everybody wants to sell their gold all because Bloomberg says “people familiar with the matter” claim President Trump had an interview with Taylor, and the President found Taylor “favorable”.
Stanford University economist John Taylor, a candidate for Federal Reserve chairman, made a favorable impression on President Donald Trump after an hour-long interview at the White House last week, several people familiar with the matter said.
Former Fed board governor Kevin Warsh has meanwhile seen his star fade within the White House, three of the people said. They would not say why but Warsh’s academic credentials are not as strong as other candidates, and his tenure on the Fed board has been criticized by a diverse group of economists ranging from Scott Sumner to Nobel laureate Paul Krugman.
Trump gushed about Taylor after his interview, one of the people said. The president has always been prone to hiring people with whom he has a good relationship. However, he told the Wall Street Journal in July that he would “like to see rates stay low,” and Taylor is the namesake of a well-known monetary policy rule that would generally advocate higher interest rates.
Taylor is a monetary policy expert whose equation on policy-rate settings is a standard reference tool used by central banks and economists around the world. He also leans against unbridled Fed discretion and has said the central bank needs to be more transparent about its strategy.
Of course, it doesn’t matter who President Trump nominates for Fed Chair, it will always be an excuse to smash:
But somehow a quant mathematical economist from Princeton who is an academic at heart is bad for gold.
Here he is fumbling on the question of a gold standard. Not only that, he argues that it should not be the free market that sets the rate of interest, but monetary policy:
Even if in writing, John B. Taylor argues “It was the gold standard that kept the long-run inflation rate so stable”. While he might fumble and avoid the question today, in that one chapter alone Taylor writes references gold 51 times.
If anybody would like to contact Mr. Taylor and ask him a question or two about gold, here’s his contact info:
The question is this:
If President Trump is a “low interest rate guy”, how is he going to appoint somebody as Fed Chair who created a “simple” equation of three variables that say where to put interest rates at every given moment?