Mises Wire

J.P.Morgan Chief Economist Tells Lies to Help His Firm and Harm Ron Paul

Michael Feroli, chief U.S. economist at JPMorgan Chase (michael.e.feroli@jpmorgan.com), stated that Ron Paul’s idea of returning to the gold standard would result in the exact opposite of what, in reality, it would result in. He implies that under a gold standard, financial markets would be volatile and would be based on manipulation of the money supply by gold producers.

In reality, asset prices on a gold standard could never rise over the long term—they could only fall. They would also be very calm, as there would not be new, fake money sloshing around. Indeed, prior to the Fed’s creation in 1913, most financial markets were very calm, even boring. Commodities in particular spiked stongly—periodically—in parallel to the bursts of money printing, and then fell again upon the subsequent monetary contraction. But all asset (and consumer) prices at the end of the 1800s were the same as the beginning of the 1800s, oil included. Indeed, if the banks had been restrained by a free market from creating monetary booms, commodity prices would also not have boomed. Equities and oil in particular were basically flat-lined.

In contrast, these days, with banks being able to print unlimited quantities of money, asset prices are very volatile and continue to rise. Feroli alludes to the OPEC cartel controlling oil prices (which they don’t). But the banks are in fact a cartel that controls—indirectly—ALL asset prices, including oil. Still, Feroli says that if the free market and gold producers supplied our money, prices would be high and volatile. In other words, what Feroli says would be the case under a gold standard would not be. It’s the case currently because Feroli’s industry is in charge of creating money instead of the free market. And, it’s absurd to think that scores of producers could control the supply of money—especially any more than the monopoly central bank does today!

Feroli knows better. He knows the real story. He lied in order to help is bank, his industry, and himself. Here is the email I wrote him:

Dear Mr. Feroli,

You stated:

“We would still have monetary policy – it would be set by gold miners in South Africa and Uzbekistan, rather than bureaucrats in Washington,” said Michael Feroli, chief U.S. economist with JPMorgan Chase.
“If you like what OPEC means for oil prices, you’d love what the gold standard would do to financial markets.”

I’m sure your understanding of economics is not so little that you really believe such illogical, stupid statements. If it were, I would be happy to educate you. But indeed, it’s worse: you state such audacious lies merely to protect your employer and your industry. You want to keep benefitting at the expense of other citizens by redistributing their money to you, your firm, and to wealthy investors by way of inflation. You are actively promoting theft and the harm of millions of people. You will win, because people are ignorant enough to believe your propaganda. But no matter, it is immoral and unethical.


Kel Kelly
Atlanta, GA

All Rights Reserved ©
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute