“We’re in a government-dependent financial system; I never thought I would live to see the day… We’ve got to fight to get away from that.”

That is what Paul Volcker had to say today when asked about the state of the economy. He was appearing at a forum on the Future of Finance sponsored by the Wall Street Journal.

He was also a bit outspoken on the Fed and inflation as well as the recent statements by the Chinese government on the safety of their U.S. assets.

He was dismissive of the Fed’s stance that they want to have a level of inflation conducive to recovery. He indicated his preference was for a policy that would maintain stability of the currency which he said would be conducive to confidence and recovery.

As for the Chinese, he offered little in the way of sympathy. In his opinion they chose to place themselves in a position of holding vast dollar reserves and he suggested that “… they shouldn’t come around blaming it all on us.”

A refreshing bit of candor. Something that seems to be in short supply.

more: here