Paul Volcker Can Save Us Again From That 70s Show

Yesterday former Federal Reserve Chairman Paul Volcker appeared before the Joint Economic Committee of Congress. In watching the video of his testimony, it was easy to imagine how our economy and financial institutions could be so much healthier if Volcker was back at the helm of the Fed.

At 6 foot 7 inches tall, Volcker is a commanding presence, yet he has a humble and unassuming demeanor. George Soros calls Volcker “the exemplary public servant – he embodies that old idea of civic virtue.”* Virgo is the sign that rules work and service. Volcker embodies this archetype as he was born with the Sun, Mercury, Venus, and Mars in Virgo. Today’s Wall Street JournalFed Balance Sheet Worries Volcker”, aptly describes Virgo energy. Accountants are ruled by Virgo as it is a very detailed oriented sign. People who strongly embody this energy tend to be worriers. With his Sun (self-identity) conjoined with Virgo’s ruler Mercury (communication), Volcker doesn’t masquerade his thoughts and intentions. Masquerading is a characteristic of Volcker’s successor, Alan Greenspan, who has the Sun in Pisces – the opposite sign of Virgo.

In addition to the Sun and Mercury, Volcker has Venus and Mars in Virgo. Venus rules finance, and Volcker would like to see the Federal Reserve take greater responsibility in regulating financial markets. Mars is the warrior; the planetary energy of action. Volcker’s Mars opposes Jupiter and Uranus in Aries (a sign ruled by Mars). He had the courage (Aries) to rebel (Uranus), ignoring the political (Jupiter) mandate imposed on the Fed in 1978. Greenspan and Fed Chairman Ben Bernanke have used the Full Employment & Balanced Growth Act as an excuse to ignore inflation. By raising the Fed funds rate to a record 20% in 1980, Volcker won the battle against inflation.

Virgo is an earth sign, and as such takes a common sense approach in all matters. Volcker is more concerned about how monetary policy affects real world economics than any other Fed chairman. With his Mercury favorably aspecting Pluto, Volcker has a penetrating mind that cuts through the financial engineering. He said that the Consumer Price Index’s so-called “core” inflation that excludes food and energy, “doesn’t feel quite right” because these prices have been on a consistent upward trajectory rather than “volatile” as the government describes. Volcker warned that without focusing on this and other inflationary indicators such as the weak dollar, “we are back to the inflation of the 1970s or worse.”

Volcker should know. Volcker became Fed Chairman on August 6, 1979 (until August 11, 1987). Transiting Saturn in Virgo conjoined Volcker’s Sun then, indicating his increased responsibilities and powerful government position. Now that Saturn is back in Virgo again, the world is faced with some of the same issues it faced in the late 1970s: inflation, tighter supplies of food and fuel, and stagnant wages. Yesterday Volcker described the economy as “too dependent upon consumption.” The lack of savings in America is made worse by the current Fed funds rate at 2% and “core” inflation running above that.

Pluto in Capricorn is challenging Volcker’s Jupiter in Aries, motivating him to publicly express his monetary and political positions. (Yesterday he formally endorsed Senator Obama for President.) At the Congressional hearing yesterday, Volcker suggested a “chief supervisory regulator” who “could be the Fed Vice Chairman.” This person should be confirmed by Congress to make the official more “accountable.” He believes the regulator should be part of the Fed due to its capacity as the lender of last resort and the Fed’s degree of political independence. In my opinion, how much political independence you get from the Fed depends on who’s running the show.

I wrote last year that planetary transits to the Federal Reserve and Bernanke’s charts would bring major changes and increased responsibilities for the central bank and its current Chairman. Volcker stated yesterday the Fed is “not equipped to do it now” as the central bank would need “a strong staff” and “math experts to match the other side” (Wall Street).

In September 2008, transiting Saturn will once again conjoin Volcker’s Sun and Mercury, along with natal Venus in November. Between September and the end of the year, Jupiter in Capricorn will harmonize with Volcker’s Mercury, Venus, and Mars. There’s a good chance that Volcker will be back in the limelight. While I would like nothing better than Paul Volcker replacing Bernanke as Fed Chairman, I hope at a minimum the new Administration and Congress will regularly seek his wise counsel in an official capacity to guide us through these challenging economic times.

Paul Volcker: September 5, 1927 time unknown Cape May, New Jersey

*Financial Times: “Man in the News” by Chrystia Freeland

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