Yellen – Inherited a mess? – or did she perpetuate the problem by not taking action?
“To punish me for my contempt for authority, fate made me an authority myself.”
― Albert Einstein
I read a blog that stated basically that:-
* Yellen inherited a mess
* Yellen is trapped and has no escape
* Bernanke that listened to the bankers
* I together with others are blinded by our own prejudices
* Not only that we proffer the bullshit that is spun by ‘pretend’ analysts
Now bear with me – I am the most critical on all of the Central Bankers – but in particular Yellen and Carney.
I read this blog note and thought it was utter tripe – influenced by his (or their) own self interest maybe?
Let us look at the facts – first comparison was to ECB and The Fed. Regardless of which country is suffering the deflationary problems – let us look at the two individuals – who usually are the target of my scorn.
What is the difference between Draghi’s stupidity in informing select groups (1) prior to undertaking various measures and Yellen being responsible for leaks at the Fed? (2)
That question can be answered – no difference whatsoever of policy implemented – (and it should be noted that Yellen has not implemented any policies to date other than sit on her hands) – both sought to either inform or divulge information that is considered confidential – allowing third parties to gain an advantage.
So morals and ethics – disregarding policies are the same.
I must have missed something ‘really’ big in my summation of her prior inactions in my posts on her actions and of ‘flip flopping’ on the mess that she inherited.
Yellen is the head of The Federal Reserve – an apolitical appointment and the Fed is responsible for the domestic economy.
Janet Yellen is an academic – yes pure and simple with her very short stint being employed as an ‘Economist’ – with The Fed – then returning to her academic studies. She has no real world business exposure full stop.
Take note of those two proceeding simple fact.
If Bernanke was subject to the Bankers manipulation – than where does that put Yellen – when she is influenced by third parties ‘not to’ increase interest rates?
Since when does Ms LaGarde from the IMF take over advising the Fed and Yellen on the interest rate policy to be implemented for US domestic policy – as she did in June 2015?
Who is in charge at The Fed? – The Wicked Witch or Granny Janet?
Now our ‘Banker boy’ Bernanke – through his term – proposed that the reduction of interest rates was necessary – one must ask – did any of the then Governors dissent?
To this the obvious answer is no – it was a unanimous decision.
Yellen had the opportunity to lodge an objection – as she certainly was familiar with the situation in Japan and that little ditty is on record and quoted by me in a prior blog.
But no – if one looks at all of the minutes of The Fed – she agreed to the reduction of interest rates – and continued to assent – during her tenure as Governor since 2004.
Yellen it is said ‘cannot reverse the QE and sell the Bonds Bernanke bought’ – agree but the Fed has no cost of capital – so the alternative is to allow these to mature anyway – and the 6 percent paid annually to the shareholders would have been paid regardless of the situation.
Then we have the comment on Pension Funds ‘that she is facing a meltdown in Pension Funds as the interest rates were too low for too long.’
Excuse me – how long has Yellen been in office?
Has she not had the opportunity to increase rates?
Then I am ‘blind’ to how politics function – and the IMF is brought into the picture.
Simple – in fact Yellen is an apolitical appointment – acting for and on behalf of the US – ‘domestic’ policy is her job. Technically to run The Fed without external input – as to the internal state of affairs and procedures.
If Yellen did increase interest rates in June 2015 would the pension funds be better off – than having these deferred by maybe a further 6 months or longer?
Do the math.
Shall we comment on the Bond Bubble now or wait?
As stated by the blog writer – we ‘proffer bullshit’ – so the Bond Bubble can wait until the odor of the bullshit dissipates.
“That is what I have always understood to be the essence of anarchism: the conviction that the burden of proof has to be placed on authority, and that it should be dismantled if that burden cannot be met.”
― Noam Chomsky
Yes Yellen has inherited a nightmare and she was a Governor during the tenure of Ben Bernanke – no dissent – no negative voting against the Boss. Her silence in fact is a ‘lie’ and shows her duplicity on the whole situation.
All The Fed has done since the appointment of Greenspan, Bernanke and Yellen has created far greater bubbles that would have occurred without their intervention – of lack of direction – and no action to address the situations that developed.
“I think it only makes sense to seek out and identify structures of authority, hierarchy, and domination in every aspect of life, and to challenge them; unless a justification for them can be given, they are illegitimate, and should be dismantled, to increase the scope of human freedom.”
― Noam Chomsky
Yes love Chormsky – an admission I am prepared to make.
Oh and I am blinded – as I do not understand politics – well excuse me then – prefer to be blinded by politics than by apathy.
2. http://www.psmag.com/business-economics/whos-leaking-confidential-information-from-the-federal-reserve and here http://www.nakedcapitalism.com/2015/06/unresolved-allegations-of-criminal-insider-trading-leaks-from-the-fed.html