The morality of central banking

Republican presidential candidate Rick Perry made the news with his comment that it would be almost treasonous for the Federal Reserve to print more money. I'm a bit unclear on what he meant by this but my guess is that what he is talking about is anther round of QE, the practice where the Central Bank buys government bonds with newly printed money in order to lower bond yields and instead channel investment in to the stock market. This has the added effect of keeping government borrowing costs low, encouraging more borrowing by the federal government. Which I'm assuming is why Mr. Perry has a problem with it.

There is also a broader mistrust of central banks in some right wing circles. Since the abandonment of the gold standard central banks have gained full control over the money supply by their control over the printing presses. This means that they can determine the value of all money. In effect they can cut all workers wages in half if they so wish, or drain all the value out of people's life time savings. Believers in limiting the power of government are understandably uncomfortable with this. Instead they want "sound money" tied to gold or some other stable asset.

I have some sympathy for this view but is satisfied by keeping the power over the printing press at an arms length from the politicians by the means of central bank independence. Something that can be seen as threatened when politicians like Mr Perry try to influence them by deeming some policy decisions treasonous.