Janet Yellen: "Rising Commodity Prices Don't Warant Policy Shift"

Tyler Durden's picture

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Cognitive Dissonance's picture

Last paragraph.

In summary, the surge in commodity prices over the past year appears to be largely attributable to a combination of rising global demand and disruptions in global supply. These developments seem unlikely to have persistent effects on consumer inflation or to derail the economic recovery and hence do not, in my view, warrant any substantial shift in the stance of monetary policy. However, my colleagues and I are paying close attention to the evolution of inflation and inflation expectations, and we are prepared to act as needed to help ensure that inflation, over time, is at levels consistent with our statutory mandate.

In a pornographic movie this would be considered "the money shot". Janet, here is my handkerchief. Please get yourself together before going outside.

SheepDog-One's picture

The country burns, yet normalcy bias is re-established day after day. 

Go ahead Janet, keep printing! This is about to get fun real soon.

Cash_is_Trash's picture

Are these people stupid or clueless?

jmc8888's picture

Stupid like a creampie surprise. 

Which of course is a fake 'surprise'.

supernickel's picture

There will be no QE3. Dollar demise is put on hold for another day. Janet's just trying to make sure that the "surprise" rate hike looks like a black swan to those who believe her.

In the meantime, "surprise" temporary winner: the euro. Salute to the "experts" who predicted parity AFTER the move down to 1.20 last June. Ha, ha, ha ..... yeah, right, it's all linear, once any idiot can see the "linear" trend ... ha, ha.


Careless Whisper's picture

all lies. they know it. there is no one else out there to buy $1.6 billion in treasuries unless rates skyrocket. so they monetize the debt, claim inflation is transitory, juggle the books, and the system works, until it doesn't.


supernickel's picture

Nicely said. However, if they need to "save" the dollar, a little stock market crash will do wonders to "create" a lot of t-bill and t-bond buyers. Kind of what will happen shortly. Walk away in May will be too late, folks.

A Man without Qualities's picture

They remind me of the generals on the Western Front in WWI.  When the three day barrage followed by sending 4 divisions over the top failed to achieve the objective, they would decide the solution was 5 days of shelling and 8 divisions.  When eventually they were removed from their posts, they would spend until the end of their days muttering that their strategy would have worked if only they had more guns and more men.  

"Rather, we pay attention to core inflation and similar measures because, in light of the volatility of food and energy prices, core inflation has been a better forecaster of overall inflation in the medium term than overall inflation itself has been over the past 25 years."

The problem with these idiots is they don't accept how much the world has changed since 1986....

Cognitive Dissonance's picture

Nice WW1 analogy.

When a group of people seem to act at cross purposes to their stated goal or against otherwise sound advise I submit that maybe their real purpose is not as they state.

A Man without Qualities's picture

I don't know - it's amazing how hard it is for most people to accept what they are doing isn't working and change strategy.  I do see this ability as the mark of a great leader, but that's sorely lacking right now.  

There's a tendency to assume that apparently stupid decisions made by American leaders hide ulterior motives, but is that because we prefer to believe they are Machiavellian, rather than just dumb?

I felt this about Cheney and the Bush cabal - everyone thought Cheney was some Kissinger-like puppet master, pulling all sorts of strings behind the scenes, but all I knew from his time at Halliburton was the guy was a doofus.  I thought he liked to cultivate this image as a master of the dark arts to hide the fact he was just bumbling around in the dark.  

Hugh G Rection's picture

stagflation bitches.


just modify the CPI again.  Who needs food and energy? As long as dildos and Ipads are cheap all is well.

alien-IQ's picture

"underlying inflation too low"

WHAT THE FUCK?!?!?!?!?!?

SheepDog-One's picture

In other words, 'You aint seen shit, yet'.  :D

Cone of Uncertainty's picture

Yep, better re-calibrate your inflation-O-meter, mother fuckers.

Careless Whisper's picture

Miss Yellen is highly qualified to take Mister Bernank's position should he take that job offer from the IMF.


Ruffcut's picture

Now we have yellen, soon to be screamin.

oogs66's picture

Why is wage pressure not global?  As people in China and Egypt etc want more money for their work they will drive up prices there and jobs won't shift back here because our wages are still out of touch with global reality.   The fed cannot choose which parts of the economy are global and which aren't!  U.S. wages are NOT the only (or even main) driver of inflation in the U.S. anymore. 

LawsofPhysics's picture

It is, and the end game for TPTB is to have all the world living like the average Chinese.  How do you feel about that?  Hedge accordingly.

oogs66's picture

I feel sad, but can't help but agree.  We don't have the stomach to take short term pain to create a better future.  We are pissing away our remaining wealth to maintain a standard that cannot be maintained.

LawsofPhysics's picture

This puts more than "a painful squeeze on the pocketbooks of American household" idiot.  The margin compression for anyone who owns a business is horrific.

The moral hazard of Fed policy has been unleashed for quite some time.  Again, the inflation/deflation debate is pointless.  Some asset classes will continue to deflate, some will inflate.  I think that there is more deflation (in technical economic bullshit terms) to worry about, but buying power is and will remain all that businesses and individuals a like should be concerned with.  The full brunt of those "zeros" that the Fed has been adding to the books of the primary dealers has definitely not been felt by the American consumer... ...yet. Remember, buying power can take many forms, you will either have it, or you won't.  Hedge accordingly.



SheepDog-One's picture

Right, 'buying power' can even be in the form of an AR15, depending on the situation.

ATM's picture

Of course these fucktard academics at the Fed don't beleive we can have inflation when wages are rising. That's what it says in my Econ 301 book afterall.

But that 301 book never contemplated rampant monetization of the debt. That's a paradign shift that these assholes can't decipher because it hasn't been written about occuring in the US .....yet.

Once the book comes out they'll get it but we'll all be scavenging and hopefully laughing at the rotting corpses hanging from the lightposts.

SheepDog-One's picture

And bottom line, no way do I believe these FED's are the only ones among us who DONT see it? All just a puppet show, they know exactly what theyre doing like a professional building demolition company. Just diverting questions from any onlookers about what theyre doing while planting the base charges by saying 'We're actually putting in reinforcing braces to the structure'. One morning soon the button will be hit and we'll be looking at a pile of rubble, demolition team long gone from the scene.

kridkrid's picture

When I think back to my intro to econ classes, I see them as little more than pure propaganda written about a system that didn't even exist.

But that 301 book never contemplated rampant monetization of the debt. That's a paradigm shift that these assholes can't decipher because it hasn't been written about occurring in the US .....yet.


It's more than the monetazation of debt, but debt as money.  The idea that Savings equals Investment... except when it doesn't... because money is created out of thin air to begin with and then multiplied through fractional reserve banking, creating "investment" along the way.  All of the models are clearly, and quite simply wrong... why teach them?

IQ 145's picture

 It's the "science" of Financial Astrology; complete with Masters you cannot question.

ATM's picture

They continue to teach it because it's the only things they know. They are incapable or unwilling to understand or admit the truth. They are either liars or dullards and perhaps both.

Catullus's picture

In summary, we're using the same failed, disproven theories of the 1960s and 1970s because no one told academia that they're embarassingly and laughly full of shit. There continues to be some supposed link between unemployment and inflation "expectations". Pv still equals mt in our world. And right now, we're still thinking that their is no inflation because CPI says so.

Everyone else is a racist extremist without a PhD.

SheepDog-One's picture

I dont believe it, that theyre the only ones just using some theory and are oblivious to reality? They were all put there to plant the strategic demolition charges, and while doing it confuse and obfuscate, but no way do they not know what theyre doing.

Catullus's picture

It's tough. When you talk to people who work for the fed or IMF or World Bank, they have an internal confirmation bias to their ideas. And I find that the data junkies using seriously flawed econometric modeling cut off discourse to challenging the accepted theories. To conclude something as simple as "you've doubled the money supply, no shit prices are going up" doesn't fly with these people. Then tell them there's no way to predict which specific prices go up and they go off into some nonsensical banter about your inability to predict anything with any accuracy because you haven't used a historical data set to test it. Economics and history (the same thing in a lot of cases) are two disciplines that do not move forward in thought. Bad ideas stick around for decades in economics and they manifest whole subsections of thoughts that are also flawed.

I'd say there's a willful ignorance to the whole thing. It falls under the "no one prove me wrong, so I'm just right." Alan Greenspan gets like this when you finally back him into a corner.

LawsofPhysics's picture

"no one prove me wrong, so I'm just right." Alan Greenspan gets like this when you finally back him into a corner.



Yes, economics is the only field where the lack of findings or negative results are used as proof of principle.  Does not work that way in disciplines based on observable, measurable entities.  Try starting a biotech company on negative results, it won't happen.  Science and engineering require that you measure the stress a material can take before you build the bridge or sell the technology.  The system is broken, we all know it, why not just scrap it and start over.  Seems like it would be a lot less painful for the vast majority of people.  I look around now and see dentists trading services with their mechanics.  Not because they have too, but simply because they are fed up with giving more to a broken bailout-happy system.  More and more of this will occur.  Why not, fuck the taxman!  Crash the system, crash it now, the sooner we do, the sooner compensation will find its way to people who are actually worth a shit.  I still have some arable land not being used and have begun talks with some low income folks interested in sharecropping.  Fine with me, even these folks have gotten sick of some of their entitlement-happy neighbors and recognize what is coming.  Totally blew me away when they contacted me.

LawsofPhysics's picture

They know exactly what they are doing and yes, for the most part everyone else is an extreme racist lacking a Ph.D.

SheepDog-One's picture

Yes, all who can see what theyre doing are obviously redneck racists.

IQ 145's picture

 Approximately. "Stagflation" didn't happen; because, it still doesn't fit in their theory. "Beatings with a stick will continue, until Morale improves".

Rider's picture

"accommodative monetary policy stance still appropriate because unemployment too high, underlying inflation too low"


I do pay for what I eat and drive and you are making me pay more by debasing the currency you darn FED punk!

truont's picture

Yellen is signalling the future:

the current "underlying inflation [is] too low."

QE3, anyone?


Rewind the news reel:

"If it were possible to take interest rates into negative territory I would be voting for that,"



So whoever still thinks QE is ending, raise their hand.

SheepDog-One's picture

QE goes forward? Total implosion.

QE stops? Total implosion.

Take your pick!

alien-IQ's picture

I'll take Total Implosion for $500 Alex.

Daily Double?

truont's picture

Right, they know this will end badly.

Shall it be a deflationary collapse?  Or a hyperinflationary collapse?

They have chosen the hyperinflation, which better protects the banksters and screws the proles.

LawsofPhysics's picture

Mixture of both.  They are trying to "manage the collapse" by slowly easing everyone into slavery.

MachoMan's picture

The seesaw allows the principal actors more time to convert their spoils from the ether to real wealth (ambiguity is the fuel of every printing regime)...  at the same time margin compression kills 80%+ of the american populace.  I suppose, to a large extent, we already had a class society...  all that is happening now is we're having a collective recognition...  combatting a significant case of denial.  And the standard of living for most everyone is going to decrease...  and not by a little.

The limited liability entities will be cast away, while their principal actors prevail...

Everybodys All American's picture

With all certainty I would not want to be one of these Fed heads when the s hits the fan. And it's not far away.

reader2010's picture

Brain dead fuckers in the Fed. They fuck up all the honest and responsible people on the main street.  Thomas Jefferson was right. 

SheepDog-One's picture

I simply dont believe theyre brain dead. Theyve been brought up thru the ranks, tested for total reliance, and put there to systematically destroy the economy, markets, and currency. Bernanke...yes he's an expert on the great depression, EXPERT in knowing how to totaly destroy it all and to put us in the greatest depression of all time and guarantee theres no way out of it!

kridkrid's picture

I agree that collapse in inevitable (inflationary or deflationary) and I also believe that those at the fed recognize this... so what's the end goal, in your opinion?

SheepDog-One's picture

They want a 1 world govt and bank, all the rest slaves, and have to bring everything down just right so theres no chance of the frogs hopping out of the boiling pot.

reader2010's picture

To achieve that, they need to control China, India and the rest of Asia. Can they do it?

MachoMan's picture

Copenhagen says no...

Does collusion work in perpetuity?