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When Ignorance Is a Central Banker's Only Defence
Stephen Flood

“Power tends to corrupt, and absolute power corrupts absolutely”

The 19th century British politician Lord Acton coined the phrase, but the idea was not new to him. The idea was aimed at monarchies that all power is given to, or as was generally the case, power taken by monarchies.  

In today’s advanced economies this phrase could now apply to central bankers. U.S. Federal Reserve Atlanta President Raphael Bostic is the latest of high-ranking Fed officials to say that his personal investing activities broke ethics rules. Let’s not forget that those rules exist to prevent the kings of central banking from unfairly serving themselves ahead of their duty to us. 

“Atlanta Federal Reserve President Raphael Bostic said that over the last few years some of his personal investing activity inadvertently happened in periods where it was forbidden by U.S. central bank ethics rules at the time.

Bostic explained in a note that accompanied revised financial disclosure forms going back to the start of his tenure as Atlanta Fed president in 2017 that trades violating the ethics code were made by financial advisors and were not done under his direction.”

Bostic plays ignorance – his excuse for the violations “Due to my reliance on a third-party manager, I was unaware of any specific trades or their timing, including a limited number that took place during Federal Open market Committee blackout periods or financial stress periods. Similarly, I was unaware of when my holdings of U.S. Treasury funds in 2021 exceeded the limits set forth by the FOMC’s trading and investing rules”, (Reuters, 10/16). 

Of course, as the lip service to the public goes, The Fed spokesman has released a statement that Fed Chair Powell “has asked the Office of Inspector General for the Federal Reserve Board (of Governors) to initiate an independent review of President Bostic's financial disclosures.” 

And of course, this is the same Office of Inspector General that after an “independent” review cleared both Chair Powell and Vice Chair Richard Clarida of any violations; even though in February 2020 he traded between $1 million and $5 million out of a bond fund into stock funds one day before Chair Powell issued a statement indicating potential policy action due to the worsening of the Covid-19 pandemic. (Bloomberg, 10/2/2021).

Don’t forget that his whole scandal broke in September 2021 – right as the Fed was announcing its plans to start tapering assets. See our post from September 23, 2021 Central Banking Is A Joke, And You Are The Punchline.

Has the “independence” of central bankers imbued them with too much power? They are not elected officials – but appointed by politicians that, arguably, have many ethical and conflicts of interest of their own. Central banks now choose which corporations, banks, municipalities, and even what governments to save during a monetary crisis. These bankers are people who create a wide number of ‘special purpose vehicles’ and dole out funds to only those banks, corporations, municipalities, and governments they see fit to save. While other entities that don’t become deemed worthy for saving directly are forced to be swallowed up in liquidation deals brokered by none other than the central bank itself.

The Fed, being the central banker to central bankers, seems to have let the power it has been afforded by the American congress corrupt many of its top officials. And since the investigation into these allegations is internal – so the consequences of unethical, if not illegal, behavior, has not appeared as of yet; maybe it never will.

Yes, Richard Clarida resigned as Vice Chair of the Fed in January 2022, roughly two weeks before his term was up. But no fines were paid, no criminal charges laid, not even a proverbial mild reprimand was given. He simply resigned with return to abundant speaking fees and a tenured position at Columbia University.  

We’ll see what the ‘independent’ investigation of the Office Inspector General finds about Mr. Bostic’s trading activities, but we are not convinced that the Atlanta Fed President or the Office Inspector General have the public’s interest in mind when acting on their financial market bets. 

The power of the central bank has gone far beyond its intended reach. Today would be a great moment to remind readers that any single physical gold bar cannot front run the investment decisions of another gold bar. Physical metal investors understand that we are all equal, which is the best way to be fair. As always the central bankers reminded us this week that they often need to be ‘more’ equal than others.

If you really enjoyed this blog then take a moment to head to GoldCoreTV, our YouTube channel. We have a wealth of brilliant guests and commentary from the GoldCore team, all there to keep you up-to-date and in the know about what’s really going on in the economy and financial markets. 

Watch our latest interviews with Rick Rule and Gregory Mannarino, now. 




Stephen is the CEO of GoldCore and has been part of the company for over a decade. Ensuring the business runs effectively, he works with select clients and strategic partners to cultivate new business opportunities.

After a BSc Hons degree in Business at Portobello Business College in Dublin, Ireland, Stephen began his career in finance. He held financial and trading posts in New York, before joining Goldman Sachs as a Sales Trader in Equity Derivatives.

Later returning to Ireland from the US, he put his experience in trading, risk, and financial markets at Goldman to good use. His entrepreneurial drive led him to establish his own financial services firm at GoldCore. Stephen now leads a group of professionals who advise clients on gold and silver purchasing.

He is married with three young, lively boys, and, when he's not at work, he loves the outdoor life. He resides in the rural Dublin Mountains and enjoys mountain walking and biking with the family.

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