No, we aren’t talking about military power; we are talking about financial power.
When you think of financial power on the national level, one thinks of a the Federal Reserve. Those in the Federal Reserve have such power, when they make a decision on interest rates or purchasing bonds, they are affecting the cost of money and the supply of money, which, thus affecting every citizens’ pocketbooks and the global financial market.
Sad to say, not a lot of our populace understands the policymaking decisions of the Fed.
Those who do understand are C.E.O’s, bankers, politicians, businessmen, etc. Those whose decisions require knowing at least the basics of the Federal Reserve policies.
Looking back, we all remember Alan Greenspan, an earlier chair of the Fed. Then came Ben Berknake, then the assuaging Janet Yellen, and now Powell, who won out over Cohn who didn’t have his PhD in economics. The decisions of these folks are headline material.
One of the recent Fed conference meetings was at Jackson Hole. In attendance was Mario Draghi, head of the ECB, European Central Bank, and some other global finance ministers.
They work together setting targets for inflation, interests rate policies, etc. The outcome affects costs of imports and exports, value of currencies, cost or mortgages and value or cost of goods and services to the consumer.
Wow! That’s a handful of power and it touches the lives of all of us.