Washington Metro Objectivism Discussion (WMOD) 
               September 20, 1995 Meeting

       "The Fed, Alan Greenspan, and Objectivism"

     The Wednesday September 20 meeting of WMOD will feature
 a talk by banking expert Bert Ely.  The talk will explain
 why,  contrary to almost universal belief, the Federal
 Reserve System has almost no real power today over inflation
 and interest rates, and why that is a good thing.  Instead,
 the Fed's influence over the economy grows solely from the
 perception that it has that power.  This situation is
 reminiscent of the Wizard's power in "The Wizard of Oz,"
 which was exposed as a sham when Toto pulled back the
 curtain to reveal the Wizard's true nature.

     In particular, Bert will explore why self-interest within
 the media and the financial markets preserves the perception
 of the Fed's power.  This power has given Fed chairman Alan
 Greenspan an aura of omniscience that is inflated by his
 obfuscations.  How could Greenspan, once a member of Ayn
 Rand's inner circle, become, like all central bankers, an
 archetypal central planner?  Is Greenspan an Objectivist
 gone bad, or can his position be reconciled with Rand's ideas?

     Internet users will find a paper by Mr. Ely: "The Fed:
 America's Toothless Tiger" and a shorter article "The Fed Is
 A Toothless Tiger, as the Markets are Learning," at
 http://www.cais.com/ely.  A further understanding of the
 perception of the Fed's power can be gained by viewing that
 great monetary epic cleverly disguised as a children's movie:
 "The Wizard of Oz", or by reading the book on which it is
 based, L. Frank Baum's "The Wonderful Wizard of Oz."

     Bert Ely is a financial institutions consultant
 specializing in deposit insurance and banking structure
 issues.  He is the principal in Ely & Company in Alexandria,
 Virginia.  Mr. Ely was one of the first to publicly predict,
 in 1986, a taxpayer bailout of the FSLIC, the S&L industry's
 deposit insurance fund.  In 1991, he accurately predicted
 the non-crisis in America's banks and in 1992 the forthcoming
 taxpayer bailout of the Japanese banking system.  Mr. Ely
 developed, and has helped transform into comprehensive
 legislation, the "cross-guarantee" concept for privatizing
 banking regulation and its attendant deposit insurance and
 systemic risks.  

      When and Where?

     Join us for dinner on Wednesday 9/20 at 7 pm and/or for the 
 talk at 8:15 pm at the Fortune Chinese Restaurant at Baileys 
 Xroads, VA on Route 7 between 7 Corners and Columbia Pike (5900 
 Leesburg Pike 703/998-8888). You can take METRO to the West Falls 
 Church stop and then take METRO buses 29A or 29B East on Route 7 
 toward Baileys Xroads. The Fortune is on this route. After the 
 meeting we can give you a ride back to a METRO station.  WMOD has 
 arranged for a $15 fixed price dinner (including tax and tip). 
 Or you can order from the menu.  Please RSVP to WMOD before noon 
 the day of the dinner and talk so that we can tell the restaurant 
 how many tables to set up.
   To keep informed about WMOD and related activities, send your
 email address and/or snail mail address to: 
 |Dave Saum             |Email  : DSaum at infiltec.com       |
 |Infiltec              |Tel    : 703/820-7696        |
 |PO Box 8007           |Fax    : 703/671-9350        | 
 |Falls Church, VA 22041|"Sapere aude" (dare to know) |

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