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Guest Post: If I Were Federal Reserve Chairman I Would …
Submitted by Damian Hoffman of Wall St. Cheat Sheet. FYI - Fred Hickey is the author of the excellent High-Tech Strategist newsletter.
Fred Hickey: If I Were Federal Reserve Chairman I Would …
I think I’d shoot myself. [Laughing] I don’t think I’d go to work in the morning.
All along, the problem has been that we haven’t been willing to take
any pain. So, after all the Greenspan years we always come in and
support the markets with low interest rates. At first they cut rates to
three percent, then one percent in the 2002-4 time frame. Now it’s zero
percent and we have negative real rates.
Each time we cut this low, we never let the free market forces work
their magic. The free market forces would be painful. They would lead
to a recession. If this had been allowed to happen — meaning, the
government would have not interventioned over the last couple of
decades — we would probably have had very brief and sharp recessions …
but they would have ended quickly.
Now, we’re in such a mess that the pain will be severe. That’s why I
don’t think the Fed will raise rates. We can’t take the pain. They’ve
almost gone past the point of no return.
If I were Chairman of the Federal Reserve I would let free market
forces unfold. I would let rates rise to where they should rise. These
are not normal rates that we have now. I would have to raise rates. I’d
have to do it over time.
On the other side, I would need some help from the Congress. They
would have to cut spending. Over the last eleven years or so federal
spending went up 110%. Inflation went up 27%. This is not a sustainable
path. The Fed has been funding this. They’re monetizing the Nation’s
debts.
I wouldn’t monetize the debts. I wouldn’t buy mortgage bonds and
treasury bonds. I wouldn’t be quantitative easing. I would get rates to
a normal level. So, we would take pain for the first time.W e have a
recession going on now, but once again we stepped in with ever more
dramatic means to try to keep the pain from being too great. Therefore,
stock markets never correct themselves completely — they don’t go to
your traditional bear market levels.
It’s the cleansing of the system that brings in value buyers like
me. We haven’t had too many opportunities. Normally, bear markets end
with P.E. ratios between six and eight. That didn’t happen this time —
not even close. However, that’s what would happen if the free market
system was allowed to correct itself. We would have a giant bear
market. The market would go to low levels. We would cleanse the system,
and buyers would come in. That’s what I would orchestrate as Federal
Reserve Chairman.
This is an excerpt from a full feature interview with Fred Hickey which will post next week.
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Spot on !
Gold remains the last exit.
Millions of Europeans died with gold in their pocket last time. The system is credit, once that system collapse there isn't a thing on this planet that can make you safe.
Just have to make sure those big oceans keep the war outta my backyard
Your backyard will most probably be one of the battlefields.
Come on, Europeans were not armed, We are armed to the teeth.
Pissed off too......
Shouldn't it be if I were a human living in a financially world built on the requirement of exponential growth (compounding interest) to sustain itself I would shoot myself?
As long as you guys continue to use compounding interest you will get a balloon payment at the end, last one cost 100+ million lives this one will well north of a billion or two.
Why let this one collapse when the function of the system is to expanded as far as you can? The markets will work and liquidate the unfunded liabilities, no need to worry there.
The whole system is a fraud and has been since the beginning, now as it is starting to collapse you see the fraud, what do the stupid humans want to do .... well start a new system just like the old system.
Unless you have unlimited power this system and any other system you build on compounding interest will end the same way... liqudation of the unfunded liabilities (humans).
And no PEs will not stop at 6 or 8 this time, a full on liquidation this time folks, last time it was Europe and parts of Africa and Asia, this one will be the whole enchilada and we have become very effective at liquidating since the last one.
Your two posts on this thread are dead-on. You very clearly have a solid grasp of this (unlike most posters). Where do yo work?
Most of what I speak is common sense, people don't want to look at a graph of exponential growth and when you tell them that is the pillar of their system they go that's impossible. It crushes their grand illusion of their world.
Everyone is stealing what doesn't belong to them, at the end of the line someone will pay for their scheme.
Any system based on the requirement for exponential growth is limited in duration, humans have it down to about 50-80 years.
Can you point me to this history of system reset that has occurred? I'm interested in reading about it. Thanks
Mako- can you please provide spefic examples in history that support your views? i would like to read more.
Bernanke live on CSPAN
www.c-span.org/flvPop.aspx?src=org1&s=0&e=-1&live=F&pop=Y&srv=fms.c-span.org&remote=N
I have news for you Fred, it's coming whether Ben likes it or not. And it's going to be a whole lot worse.
Ever tried holding back a bursting dam? See how long you can do that for.
...quit. And head to the hills.
Oh Ben....please keep the scam going on false hopes and sugar coated fiat paper dreams, at least until I quietly pass away in my sleep an old and happy man. Wait! Now I am sounding like a banksta entitled by birth to a good and comfortable life.
On second thought, let me die with dignity, young and virile...a warrior! A Chindit! Time for revolution!
This is a fabulous summary. Amen.
History will once again show the folly of the Fed and the U.S. government.
You mean humans, this has been going since civilization started and I suspect it will never stop.
The Federal Reserve is a Den of Thieves. Filthy Fucking Thieves.
Ben has an exit plan
he is a witty man
us at the soup kitchen
Ben in the Carribean
I would be wondering how so many smart and powerful people were letting continue this charade that is nothing more than a giant Ponzi Scheme. I would long for the days when I could teach college and lecture students who did not have a clue about my levels of competence. This is truly a cosmic joke, but I am the only one who is laughing!
Nothing will change until humans actually sit down and study exponential growth or the requirement of such, takes about 2 minutes. Once you see the obvious flaw of the system you then have a choice, humans keep picking door #1.
Door #2 is no cakewalk but doesn't contain as big a balloon payment at the end.
Door #1: chance for high growth rate (humans would have to live with what the need and not what the want), unsustainable past about a generation, large human liquidation at the end
Door #2: limited or no growth, math was sustainable over long periods, no large human liquidation needed.
Humans keep picking door #1, soon liquidation of the unfunded liabilities will speed up.
Ummmm strange.
First, big mistake, all humanity has not been passing through door 1.
A meaningful segment has been passing through door 2.
This divide reminded, humans from beyond door 2 are/were the ones to be exterminated by humans from beyond door 1.
Voids your way of thinking.
The majority of humans have either passed through door 1 or have benefited directly or indirectly from the ones that have gone through door 1.
Nothing voids what I said at all. Humans have two choices that I can see, never said if a handful of you pick door #2 you would be safe.
But keep in mind... the Fed is a FOR PROFIT PRIVATE INSTITUTION. They DO NOT have the American people's interest in mind. Understand THAT and you'll see every move they make is in THEIR interest. Ben is not stupid. He's doing exactly what the Fed needs done to rape us.
Stop scratching your heads wondering why they do what seems so wrong to help us out.
Open your eyes and their moves are clear.
Mr. Hickey, what about quantitative econometric models - you know multipliers and such. Your solution is far too simplistic to work, and you give no credit to the wonderful work central bankers and government economists have done. "I would let rates rise to where they should rise", is not a strategy that any sane member of the Fed, Treasury or the White House would approve of. Please try to focus on the problem at hand, and come up with a more sensible (interventionist) solution despite the fact that your idea is elegant, simple and much too sensible.
which is more sickening, Timmy and Ben sinking their fangs and sucking us dry?
Or watching Bachus, Barney Frank, and Paul Kanjorski lick their boots?
Unfortunately the author is being responsible, rational and honorable, all qualities that just get in the way of the Ponzi.
Even if we assume Baby Ben has all these attributes (I know, a flight of fancy, but let's be philosophical about this) "conditions" will force him to make "difficult" decisions that just so happen to perpetuate the Ponzi. Even good men, when given impossible choices, will make bad decisions.
Bernanke just claimed, to various congressmen, that:
1) USA will never default on their debt.
2) Budget deficit is unsustainable.
3) The Federal Reserve will NOT monetize debt.
Can someone teach me the math that makes all 3 of the above hold true.
11th dimensional Geometry and Calculus done by ALICE @ CERN and it's massively parallel 200,000 computer matrix. Or maybe Baby Ben's hand held TI-84 Plus Silver Edition graphing calculator.
http://education.ti.com/educationportal/sites/US/productDetail/us_ti84pse.html
Get with the program dude. :>)
When Ben said, "USA will never default on their debt." He was referring to the current administration.
If I were a Federal Reserve Chairman I would shave my beard, prep my resume and walk into Goldman Sachs. Making under 200k a year sucks.
If market forces were allowed to prevail , rates wouldnt be rising , theyd sink , as there would be no such thing as QE and the deflationary cycle would be allowed to play out.
Fed Chairman, the best job in the world! Think about it, you have unlimited access to a printing press, no over site, no accountability, your hands on the world's reserve currency. I know I would live like a God damn rock star! Hell I might actually become a rock star, cut an album then buy 100 million copies through contracted buyers (I'm looking at you JPM and GS), and then buy Clear Channel and then play nothing but my album 24/7!
Well assuming the guys who really ran the fed would let me live my rock star dreams through the of coursem. Who knows they might, I think after Alan "The Undertaker" Greenspan "Helicopter" Ben Bernanke they could use a flamboyant face man.
END THE FED!
I guess it's back down to earth time for the globalist. Just have to live a boring life as a nationalist.
Taking usury to it's limits and putting the control of wealth creation into the hands of other Nationalist who pretend to be Globalist, sucker peace nicks, has America on the ropes.
Get back to basics.... Lower taxes , heavy US pro business , public work projects, and print print print were you must,it's to late to pretend we can just stop, but most of all put Gold back in charge( credibility) . Just sayin.
If I was Fed chairman, I'd keep doing what Bubbles Ben is doing. The American people are, in general, too ignorant to know that they've been getting screwed since 1913. Why does anyone think that average Americans will take an interest in history and economics before the whole Ponzi scheme falls apart? By that time, Ben and the rest of the banksters will be living comfortably somewhere else, probably with armed guards too!
Dude, The Federal Reserve System is the enforcement arm of an international banking cartel. Your due diligence would yield that fact. If you were the Chairman, you'd do as you were instructed, or you wouldn't be for long.
Mostly true. But I'd say that the IRS does the enforcement in this country. And if the IRS can't "persuade" someone, that someone has a fatal "accident".
If I were Fed Chairman, I'd stick my dick in the mashed potatoes, cuz it'd be that kind of party.
The problem is that the lender of last resort does not suffer from the requisite exposure to downside risk that go hat-in-hand with issues of moral hazard. Don't get me wrong, you'd hope they would have a slightly longer horizon than the rest of the market when it comes to disruptions so as to ensure some kind of stability (be the cool head, if you will) and allow folks an orderly exit rather than a rush when someone smells smoke. But the issue of moral hazard has now spread to the point where it impacts the fixed income statements for an entire swath of the country coming up on retirement, and an orderly exit that would normally take several years now has to last throughout the retirement-age of an entire generation. As much as we give Big Ben shit for dropping trashbags of cash from his Apache gunship, you have to admit, you don't want to be the one to make a call that could potentially set the entire country back 50 or 60 years and put a 6.5mm cal copper-jacketed 160 grain round to the back of the head of the American dream. Ordained populist sainthood or not, Obama and his woefully optimistic minions couldn't get those kind of stains out of the back seat of a Lincoln Continental.
For that, we're gonna need The Wolf.
I'd be gettin crazy paid rich, bangin hoez, and even pimpin some to my geeky underlings. A nigga gotta eat, right?
I'd set up a camcorder, strip naked and light myself on fire on the board of governer's table. j k
I'd print money in my basement and buy a lamborghini while I still could!
If you were FED Chairman you'd pretty much have to do what Ben's doing (whatever that is) or you wouldn't be Federal Reserve Chairman.
I hereby put my hat in the ring for President of the US.
My platform: I swear on everything holy, and also the FED, that I will veto every single piece of legislation that comes across my desk over the four years I am President, and will withhold funding from every single executive branch agency which I am able to defund. Which includes the IRS.
Vote for me.
We aren't voting for people unless they support auditing the FED.
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