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Former Fed Governor Warsh Admits "There Is No Plan B"

Tyler Durden's picture


At the very crux of the financial crisis, former Fed governor Kevin Warsh notes, "experimental extreme monetary policy," had the "right risk-reward", but, he warns, in this excellent (and somewhat chilling) discussion at the Milken Institute, "we left a financial crisis more than for years ago." While the politicians may 'prefer' to think of this as a crisis - and indeed "for them it is a crisis as they preside over an economy that refuses to grow," which has tended to lead to loss of office, but, Warsh condemns, "they have run out of excuses." Over the last several years, "[the Fed] has over-promised and under-delivered," and the bank's most important asset - credibility - is under attack.

The Fed has "enabled" Washington to do nothing, since the politicians expect the same "rabbit out of the hat" rescue that occurred in the darkest days of the financial crisis. This means no growth strategies ("the mix of policies has to be right") will occur. Since the financial crisis, Washington has done its level best to focus on GDP in the next quarter, or perhaps the election, and precious little beyond that short-term horizon. Warsh concludes, "There Is No Plan B."

The Fed has fewer degrees of freedom and the rest of Washington is not coming to the rescue; and furthermore "the ability of a central bank, exclusively, without the rest of Washington doing any bit of the task, to turn an economy from a modest recovery to a robust one is an experiment that is untested - and will not prove to be successful."

The entire discussion is worthy of attention but Warsh's comments begin around 18:00:

...but "the ability of a central bank, exclusively, without the rest of Washington doing any bit of the task, to turn an economy from a modest recovery to a robust one is an experiment that is untested - and will not prove to be successful."


...The Fed is taking on the problem of the shortfall in aggregate demand alone. Warsh does not believe that the Fed means to do this alone but their "good intentions" are simply not enough to get the economy to a 3-4% growth rate needed to create sustainable improvements in the labor markets.


... Warsh adds, "over the last several years, [the Fed] has over-promised and under-delivered," and the bank's most important asset - credibility - is under attack.


...The Fed has "enabled" Washington to do nothing, since the politicians expect the same "rabbit out of the hat" rescue that occurred in the darkest days of the financial crisis. This means no growth strategies ("the mix of policies has to be right") will occur - until the Fed draws the line.


...Since the financial crisis, Washington has done its level best to focus on GDP in the next quarter, or perhaps the election, and precious little beyond that short-term horizon. Warsh concludes, "There Is No Plan B." The Fed has fewer degrees of freedom and the rest of Washington is not coming to the rescue.


...In light of our status as reserve currency, the rest of the world's central banks feel empowered to match the Fed's efforts since "we do not act in a vaccuum" which due to economic and comptetive reasons, means "the US economy will not break out to the upside."


...It is not bad luck that is creating this medicority, it is bad policy

Then at 36:30, Warsh expands on the Fed's awful alternatives and his views on whether Bernanke's transmission channels via Animal Spirits and portfolio rebalancing will have any lasting impact...




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Wed, 05/01/2013 - 12:45 | 3518458 10PastMidnight
10PastMidnight's picture

Let me be the first to say, no shit.

Wed, 05/01/2013 - 12:46 | 3518462 The Gooch
The Gooch's picture

"darkness WARSHED over the dude..."


Wed, 05/01/2013 - 12:47 | 3518470 camaro68ss
camaro68ss's picture

There may be no plan B but Plan C is, print MOAR, print faster.

Wed, 05/01/2013 - 12:53 | 3518492 kaiserhoff
kaiserhoff's picture

Hollywood loves sequels.

   Thelma and Louise... putting the pedal to the metal.


Wed, 05/01/2013 - 13:00 | 3518537 THX 1178
THX 1178's picture

It all comes out in the Warsh. Turns out its all a Warsh.

Wed, 05/01/2013 - 13:01 | 3518556 SamAdams
SamAdams's picture

Clearly not part of the tribe, or if he is, isn't anymore...  No use for truth, send in the clowns (banzai's new Benyamin)...

Wed, 05/01/2013 - 13:09 | 3518590 bania
bania's picture

Who needs a plan B when the markets are at record highs?!?!?!?!

Plan A is obviously working.

Wed, 05/01/2013 - 13:28 | 3518601 Pinto Currency
Pinto Currency's picture


Warsh skipped the part explaining how printing money can ever create wealth and real growth.

Wed, 05/01/2013 - 13:33 | 3518710 ParkAveFlasher
ParkAveFlasher's picture

There's that word again, "growth", I'm not so sure that word means to the same thing to him as it does to me.

Wed, 05/01/2013 - 14:48 | 3519145 Victorio
Victorio's picture

Tell me you were thinking of this...

Wed, 05/01/2013 - 16:59 | 3519708 espirit
espirit's picture

Just add Warsh to the list of those to be purged.

Wed, 05/01/2013 - 19:47 | 3520408 TwoShortPlanks
TwoShortPlanks's picture

There is a Plan B....but you aren't going to like it.

Wed, 05/01/2013 - 15:36 | 3519386 DaveyJones
DaveyJones's picture

shit, even the kids know that the phrase "to infinity and beyond" are just the words of a plaything

Wed, 05/01/2013 - 15:29 | 3519343 Panafrican Funk...
Panafrican Funktron Robot's picture

Sounds like blame shifting to obfuscate what is blatently obvious; the Fed is exactly where it wants to be, and would greatly prefer to accelerate their wealth confiscation.  

Wed, 05/01/2013 - 13:24 | 3518681 FL_Conservative
FL_Conservative's picture

Whoops.....what was that brown thing that just breached a moment ago?

Wed, 05/01/2013 - 14:45 | 3519144 SilverIsKing
SilverIsKing's picture

And all along, I thought we were witnessing Plan B.

Wed, 05/01/2013 - 19:04 | 3520201 Zero Govt
Zero Govt's picture

we're not witnessing Plan B, we're on Plan F (QE6), which is identical to Plans B to F, print and debt-spend, print and debt-spend, print and debt-spend... it's an unrepayable debt hole worth looking at for its sheer size and incredulous maths anyone sane could justify such delrium/hopium/shit looks like 'a Plan for recovery'

Plan A of course was to be a good Regulator and prevent total banking apocalypse

The Fed fucked that up, and we''re now on Plan (bailout) F and that's yet more evidence the Fed is just one long fuck up of a clown show

nice to ser they keep their public-private sector jobs throughout this ongoing shambles. Never let it be said village idiots never get sacked for total abject continuous failure in Govt posts

Try the Free Market route Ben, it costs nothing and it's where your Ivy League bankrupt buddiess go to the fucking wall 

Wed, 05/01/2013 - 13:57 | 3518836 mrdenis
mrdenis's picture

Plan A to eternity ......................................

Wed, 05/01/2013 - 15:28 | 3519331 DaveyJones
DaveyJones's picture

Plan A is for asshole, now what is plan B for again?

Barbarus relics?







Wed, 05/01/2013 - 13:40 | 3518755 Rathmullan
Rathmullan's picture

Cool! Wet dream when word comes down that no hackademic nor larry summers/tttt-timmy type playa need apply. Instead some sort of Felix Rohatyn or even Volcker gets dusted off as "interim chairman" to unwind the mess that the BERNANK got us in.

Wed, 05/01/2013 - 13:03 | 3518557 flacon
flacon's picture

Sell in May?

Wed, 05/01/2013 - 13:25 | 3518684 NoDebt
NoDebt's picture

Quite possibly.

Wed, 05/01/2013 - 13:38 | 3518745 Ham-bone
Ham-bone's picture

speaking of Hollywood - Warsh looks just like Otter in Animal House??? 

Wed, 05/01/2013 - 12:54 | 3518497 Dr. Richard Head
Dr. Richard Head's picture

As is tradition.  No wait, Gold is tradition, printing is theft.

Wed, 05/01/2013 - 19:15 | 3520250 Zero Govt
Zero Govt's picture

Printng is theft, bailouts are corruption incarnate and fractional reserve banking is fraud

Ben's had years to work this out, typical academic he hasn't, so the headless chicken continiues to cluck around the farmyard forever blind and stupid gleefully accepting his public wages to stay/play dumb

Croneville 2013 ...same as it ever was

Wed, 05/01/2013 - 12:59 | 3518550 McMolotov
McMolotov's picture

Plan "C(onfiscate)."

Plan "C(ollapse)."

Plan "C(ave in a banker's skull)."  <---This would be the best option.

Wed, 05/01/2013 - 13:03 | 3518559 The Gooch
The Gooch's picture

I vote for "C"

Wed, 05/01/2013 - 13:06 | 3518569 SamAdams
SamAdams's picture

when in doubt, always choose C?

Wed, 05/01/2013 - 13:33 | 3518726 kchrisc
kchrisc's picture

Plan "C" is cool, but plan "G," banksters guillotined in front of their victims, well, that has my vote.             hujel

Wed, 05/01/2013 - 13:00 | 3518558 NotApplicable
NotApplicable's picture

Sorry, but that's Plan A. Please try again.

Wed, 05/01/2013 - 13:46 | 3518790 Jekyll_n_Hyde_Island
Jekyll_n_Hyde_Island's picture
Former Fed Governor Warsh Admits "There Is No Plan A or Plan B or Plan F, for that matter."
Wed, 05/01/2013 - 13:30 | 3518693 Stoploss
Stoploss's picture

Anybody know if bond prices filed a flight plan??

Wed, 05/01/2013 - 13:30 | 3518706 DeadFred
DeadFred's picture

It's FOMC day. You don't expect all those who got the early report to sit idle do you?

Wed, 05/01/2013 - 12:57 | 3518539 Ruffcut
Ruffcut's picture

Bullshit, plan B is buy everything with free money, printed out of dirty air that smells like ass. Anything worth a shit will be theirs. ONly you will have left is a worn pair of scorched panties.

Wed, 05/01/2013 - 13:02 | 3518551 cspg
cspg's picture

Plan B is to just keep on Givin'er

Wed, 05/01/2013 - 13:04 | 3518563 NotApplicable
NotApplicable's picture

Also Plan A.

Wed, 05/01/2013 - 13:11 | 3518608 sgt_doom
sgt_doom's picture

Somebody forget the so-called Dodd-Frank Financial Reform Act (or whatever the Frigg it's called)?

As usual, legislation is always the opposite of its title:  it establishes a covert bailout process from the Fed to the clearinghouse; counterparty risk is now transferred to the clearinghouse, and that is known as subsidizing; energy swaps, perhaps the only real form of hedging (and everyone should always be highly skeptical of that term, "hedging"), are transformed into energy futures, thus allowing for even more financial manipulation capabilities; ditto bonds to swaps, etc.

It should have been truthfully called, the Dodd-Frank Speculation/Financial Manipulation Consolidation Act --- and with this legislation it all is simply one giant neverending Ponzi.

Making this blog posting nebulous, at best.

Wed, 05/01/2013 - 13:56 | 3518818 Jekyll_n_Hyde_Island
Jekyll_n_Hyde_Island's picture

Those of us in finance weren't surprised at all by Dodd-Frank.

  A local mortgage tycoon and CEO/Owner said in 2009 said to me - "The entrepreneur will always outsmart the politician."  Dodd-Frank's initiatives began with the right intention, and ended as the sum of their parts.

  What are the parts?  A bunch of no-nothing politicians working off of bad data, writing bills out of the pockets of major banks and lobbies that got them there in the first place.

  It's all about allegiances, as the Durden's strive to point out daily, our elected officials don't have any allegiance  to the American people, they have allegiance to BAC and WELLS and CITI et al.

  The Sum?  Loopholes for mortgage companies to allocate funds from bottom level workers to newly designed securities.

  Get to work, Mr. Chairman. 


Wed, 05/01/2013 - 20:20 | 3520505 HardAssets
HardAssets's picture

"Washington" = politicians = poli sci majors/pre law

Ever try to talk to a politician/lawyer/liar about economics and finance ?  Complete glazed over blank look on their faces, followed by the toothy white caps smile, over anxiious handshake, and 'have a nice day !'

And people are suprised when they find out they don't even read the bills they sign into 'law' ?

America is screwed.

Wed, 05/01/2013 - 13:39 | 3518750 Poetic injustice
Poetic injustice's picture

Plan B is to put to use all the ammo DHS and other agencies have bought.

Wed, 05/01/2013 - 13:42 | 3518776 williambanzai7
williambanzai7's picture


Wed, 05/01/2013 - 13:49 | 3518794 Cognitive Dissonance
Cognitive Dissonance's picture

Bill. I thought we agreed not to publish that photo of me with that idiot's face pasted in.

I am quite proud of my new North Korean designed but (proud) American built ICBM. :)

Wed, 05/01/2013 - 15:53 | 3519471 therover
therover's picture

Are you Johnny Knoxville !? 

Wed, 05/01/2013 - 19:17 | 3520274 Zero Govt
Zero Govt's picture

I'd like to see Timmaya on Jackass taking some fast flying hard object between the legs ...can we vote on that?

Wed, 05/01/2013 - 12:45 | 3518460 Zero Debt
Zero Debt's picture

Can we panic now?

Wed, 05/01/2013 - 13:12 | 3518599 NotApplicable
NotApplicable's picture

It's recommended.

Wed, 05/01/2013 - 19:20 | 3520290 Zero Govt
Zero Govt's picture

It's too late.

Wed, 05/01/2013 - 12:48 | 3518461 101 years and c...
101 years and counting's picture

truthteller!  you belong in prison for treason!!!

Wed, 05/01/2013 - 13:13 | 3518602 NotApplicable
NotApplicable's picture

From what I read above, he just blamed DC.

Color me shocked.

Wed, 05/01/2013 - 13:17 | 3518639 KickIce
KickIce's picture

Pure arrogance.   I really wonder if they give a rat's ass at this point.  They know they can manipulate the market whenever needed and the average american doesn't care a long as the cushy government job pays and/or the EBT card works.

I firmly believe that it's a combination of ignorance and apathy that keep this ponzi alive. 

Wed, 05/01/2013 - 12:46 | 3518463 TahoeBilly2012
TahoeBilly2012's picture

One world currency should be the next policy, that and permanent drones. I also think we should have only two news channels, Fox and NPR.

Wed, 05/01/2013 - 13:04 | 3518580 THX 1178
THX 1178's picture

I Dont think a paper currency will take after it is exposed that they will print in into nothing. I think It will be Precious metals. Who would flood out of one paper and into another?

Wed, 05/01/2013 - 13:13 | 3518603 ATM
ATM's picture

better look back over history. Everybody does exactly that.

Wed, 05/01/2013 - 13:19 | 3518654 THX 1178
THX 1178's picture

no, every time a currency dies everybody goes back to precious metals.

Wed, 05/01/2013 - 15:44 | 3519437 Go Tribe
Go Tribe's picture

A drone over every home!

Wed, 05/01/2013 - 13:24 | 3518471 Aeternus
Aeternus's picture

The Bernank: So, we're going to start unwinding our balance sheet.


Yellen: Ahah!


The Bernank: Ahaha!


Yellen: Ahahahahaha!


Fed Board Members In Unison: Ahahahahahahahahahahahahahaha! * HAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHA * HA HAAAAAAAAAAAAA! AHAHAHAHAHAHA!!!!!!!!!!!!


Fisher: Ehum, no, wait, you guys cereal?

Dr. Egon Spangler Bernank: Well, let's say this Balance Sheet represents the normal amount of psychokinetic fiat energy in the New York area. Based on this morning's sample, it would be a Balance Sheet... thirty-five trillion dollars long, weighing approximately six hundred quadrillion pounds of fiat.

Yellen: That's a big Twinkie.

Dr. Ron Paul: How's the grid holding up?
Dr. Egon Spangler Bernank: Not good.
Yellen: Tell him about the Twinkie.
Dr. Ron Paul: What about the Twinkie?

Dr. Ron Paul: Whoa! Ho! Ho! Whoa-oa!

Ghost of Woodrow Wilson: The Traveller has come!
Dr. Ron Paul: Nobody choosed anything!
[turns to Egon Spangler Bernank]
Dr. Ron Paul: Did you choose anything?
Dr. Egon Spangler Bernank: No.

Dr. Ron Paul: [to Yellen] Did YOU?
Yellen: My mind is totally blank.
Dr. Ron Paul: *I* didn't choose anything...
[long pause, Ron, Egon Bernank and Yellen all look at Jack Lew]
Dr. PHD Econmoranics Jack Lew: I couldn't help it. It just popped in there.

Dr. Ron Paul: [angrily] What? *What* "just popped in there?"

Dr. PHD Econmoranics Jack Lew: I... I... I tried to think...
Dr. Egon Spangler Bernank: LOOK!
[they all look over one side of the fiscal cliff]
Dr. PHD Econmoranics Jack Lew: No! It CAN'T be!
Dr. Ron Paul: What is it?
Dr. PHD Econmoranics Jack Lew: It CAN'T be!

Dr. Ron Paul: What did you DO, Lew?
Yellen: Oh, shit!

[they all see a giant sovereign debt bubble topped with a sailor hat, Dr. Ron Paul looks at Jack Lew]
Dr. PHD Econmoranics Jack Lew: [somberly] It's the Stay Puft Bubble Marshmallow Debt Man.



Wed, 05/01/2013 - 12:47 | 3518476 MFLTucson
MFLTucson's picture

So what, as long as they can keep plan 1 working, the clown act will continue.

Wed, 05/01/2013 - 12:50 | 3518477 pine_marten
pine_marten's picture

Let me be the first to say,  FUCK YOU CONGRESS!!!  YOU ARE WORSE THAN ANY MUSLIM TERR!!!

Wed, 05/01/2013 - 13:53 | 3518804 kchrisc
kchrisc's picture

That's pretty narrow minded.

Try fuck the whole criminal enterprise of the US government. From the local level to the national, from the the dog catcher to the president, fuck you, you treasonous, thieving, murderous criminal pieces of shit.

That's better and more precise. hujel

Wed, 05/01/2013 - 17:07 | 3519732 pine_marten
pine_marten's picture

Got to wonder about the down arrow boot lickers - fuck you too!!

Wed, 05/01/2013 - 20:28 | 3520542 HardAssets
HardAssets's picture

"Got to wonder about the down arrow boot lickers - fuck you too!!"

I didnt down arrow you, but they may have done so over your 'MUSLIM TERR' comment.  Elements within the US govt run Al Qaeda and are supplying them with weapons and material to attack Syria today. Are there Muslim terrorists ?  Yes, but the majority of them are fully owned by the west. They have been used to destablize the Middle East and Central Asia for a very long time. The British Empire was even heavily involved with the Muslim Brotherhood.

There are many layers of the onion to peel away.

Wed, 05/01/2013 - 12:50 | 3518478 youngman
youngman's picture

Its printing money until no one wants it anymore...when they no longer accept it as money is when it will stop printing...

Wed, 05/01/2013 - 13:20 | 3518635 caShOnlY
caShOnlY's picture

Youngman, great point.  The will print it and print it until it is rejected.  Whoever the first country to reject it is the cause and becomes the blame. 

Then they pay off all the debts with worthless money, cut all the goodies stateside sweep up the personal retirements and VOILA!!:  We're ba-a-a-a-ck!

Wed, 05/01/2013 - 13:22 | 3518666 bnbdnb
bnbdnb's picture

"That" country will suddenly be accused of using chemical weapons on its own people.

Wed, 05/01/2013 - 20:35 | 3520550 HardAssets
HardAssets's picture

bnbdnd:  ""That" country will suddenly be accused of using chemical weapons on its own people."

Yet the US has been using chemical weapons, in many forms and using many different delivery methods, - - - for a very long time.

Ironic, isnt it ?

Wed, 05/01/2013 - 12:48 | 3518484 rosiescenario
rosiescenario's picture

"The Fed has enabled Washington to do nothing..."


Actually it has enabled them to create even more programs that kill jobs and our economy.....ObummerCare comes to mind.

Wed, 05/01/2013 - 12:51 | 3518486 The Dancer
The Dancer's picture

Herresy...seize that man! Silence him!

Wed, 05/01/2013 - 12:52 | 3518489 ak_khanna
ak_khanna's picture

The only thing the Fed can do is try to blow one bubble after another because the money being printed is handed over to the too big to fail banks in the form of QE. This is then used to speculate in real estate, currency, stock, commodities and bond markets. None of this reaches the main street and hence recovery in the actual economy is not possible through QE. Moreover speculation in commodities like Oil and agriculture products lead to higher prices thus making the lives of the very middle class paying taxes and the poor more miserable.

Wed, 05/01/2013 - 20:43 | 3520572 HardAssets
HardAssets's picture

Its not in the fascists interests for the economy to improve. If it does, interest rates will start to rise and they will be toast. Fed govt and big banks bankrupt to a degree that cannot be hidden any longer.

Every action is taken to destroy the economy and impoverish the American people so that they may be controlled. They hope to bring conditions that are so bad that the people will accept  a new global financial structure and the complete loss of political sovereignty and Liberty. They do not take actions that are 'mistakes', but because they are at war with us and what little memory of the Spirit of 1776 that is left in a few of us (no matter where they live around the world).

These are evil bastards.

Wed, 05/01/2013 - 12:54 | 3518494 fonzannoon
fonzannoon's picture

Bernak the innocent victim. Bernak the martyr. Poor bernak. he tried to save us. 

by the way when the feds credibility actually comes under fire the 10yr won't be at 1.62%

Wed, 05/01/2013 - 13:01 | 3518564 McMolotov
McMolotov's picture

St. Ben: Patron saint of counterfeiters.

Wed, 05/01/2013 - 13:36 | 3518727 ParkAveFlasher
ParkAveFlasher's picture

His first miracle: printing money without actual paper. 

Wed, 05/01/2013 - 12:52 | 3518503 Dareconomics
Dareconomics's picture

The money printing will not stop until the system either recovers on its own or collapses. Which scenario do you think is more likely?

Wed, 05/01/2013 - 12:53 | 3518510 GolfHatesMe
GolfHatesMe's picture

This is why Kevin did not complete his term at the Fed.  Wish he never left and would have kept needling the Beard

Wed, 05/01/2013 - 13:00 | 3518540 The Gooch
The Gooch's picture

He left the fed? Who's desk is he under now?

Wed, 05/01/2013 - 12:57 | 3518517 JustObserving
JustObserving's picture

When the Fed tries to unwind its balance sheet, it loses about $500 billion as interest rates rise, and US deficit rises by about $300 billion a year due to higher interest on the debt.

It will never happen.  The Fed may just forgive debt though despite denying it all along.

Wed, 05/01/2013 - 13:15 | 3518614 NotApplicable
NotApplicable's picture

I think it's hilarious that anyone even discusses it anymore. CB's balance sheets will continue to grow until they own the whole world.

After that, they won't really give a fuck, and then they pull back the curtain as the facade crumbles, collapsing under its own weight.

Wed, 05/01/2013 - 13:31 | 3518709 orez65
orez65's picture

"The Fed may just forgive debt ..." 

I'm trying to understand what you said

The Fed "buys the Government debt, that is Treasuries.

It prints money and gives it to the Government in exchange for debt, that is Treasuries. 

If the Fed forgives that debt it then it losses that asset, that is the Treasuries.

Therefore they would be bankrupt because their liabalities would exceed their assets.

Which means that the Fed would have to print whatever amount of debt they forgive.

So let's say that the Fed "forgives" $5 Trillion Treasury debt.

They can only do that by printing $5 Trillion.

Which would then show up as a $5 Trillion profit at the Fed.

Which would then go to the Federal Government.

Which would then spend that money, voila hyperinflation!


Wed, 05/01/2013 - 12:58 | 3518524 Cognitive Dissonance
Cognitive Dissonance's picture

"The Fed has "enabled" Washington to do nothing, since the politicians expect the same "rabbit out of the hat" rescue that occurred in the darkest days of the financial crisis."

And "we" have enabled the Fed and Washington. While there is no doubt that we have little to no direct control over both the Fed and Washington we are not willing to suffer the pain of our own withdrawal. As long as the pushers have a market they will continue to push their "product".

Wed, 05/01/2013 - 13:13 | 3518616 Arius
Arius's picture

yes, correct. we continue to dress provocatively, therefore it is our fault ... lol

Wed, 05/01/2013 - 13:35 | 3518714 Cognitive Dissonance
Cognitive Dissonance's picture

Nope. Won't bite on that one. This is not a case of me calling the "victim" the perp. This is me calling "us" out because we "victims" claim we can do nothing, so we continue to do exactly what needs to be done to continue to perpetuate our own victimhood. We all exist within the economic system and many of us do quite well within the system. Just because we do not agree with what is going on doesn't absolve us of our willing participation.

It takes two to Tango. The junkie is responsible for his/her addiction. The pusher is responsible for his/her own actions as well. There would not be very many pushers if there were no junkies. We all pee in the pool. We are all responsible for cleaning it up. Just because there are some who do the vast majority of peeing doesn't mean I am not responsible for my own part of the mess.

This is why nothing ever changes, because we always have our fingers pointed at everyone else as THE problem.

Wed, 05/01/2013 - 13:43 | 3518783 Arius
Arius's picture

cant blame me for trying CD :)

overall though in my humble view, i think the empires last for many many centuries.  Take the roman empire, spartacus is still remembered why, because people as a group are not able to rise.  the current empire rule is somewhat dizzy and not clear in plain view for everyone to see, however, its heavy hand is all around. i do not think it will change anytime soon and by that i mean centuries.

house debt, debt, student loans etc. are simple details, which can change what doesnt change it is the structure and for that it doesnt need two to tango, it is only one who matters and that is the one who directs when the music stops.

Wed, 05/01/2013 - 18:37 | 3520009 mkkby
mkkby's picture

Dis, you are in some sort of alternate reality.  The junkies in this case have no choice in the matter.  We were born into a system.  It doesn't matter who we vote for, or if we give a protest non vote.  Everybody can't barter and live off grid.  Nor can we attack drones and an occupying army.  It would be foolish to try.  It's not 1900 any more.  Skills are specialized.

All people can do is wake up and whine uselessly on a site like ZH.  Anything else more substantial will happen when the system implodes, as all ponzis must eventually.

Wed, 05/01/2013 - 16:01 | 3519500 Nick Jihad
Nick Jihad's picture

I have to agree with Cognitive Dissonance. For myself, I see that spending my lunch break typing cynical comments into ZH may feel good, but for three of the eight hours of the workday, I'm working to pay taxes, directly supporting the Borg (the military-prison-financial-entitlement-government complex).

As much as I hesitate to kick off yet another lame Ayn-Rand subthread, I do think that she got one thing right - the only way to fight the Borg effectively is go Galt. Of course, then there is this*:

"‎Bad men need nothing more to compass their ends, than that good men should look on and do nothing." - John Stuart Mill, Inaugural Address: Delivered to the University of St. Andrews, Feb. 1st 1867.

I say that the USSR, and communist regimes in eastern Europe, were brought down more by the workforce going Galt, than by the positive actions of political dissidents.

[* Thank you,]

Wed, 05/01/2013 - 12:56 | 3518527 smacker
smacker's picture

Anybody who prattles on about managing "aggregate demand" fails to get my attention.

Warsh must be a Keynesian friend of Krugman's. Enough said.

Wed, 05/01/2013 - 12:57 | 3518532 Inthemix96
Inthemix96's picture

Now what a fucking suprise that is then.

Was there ever a plan A boys?  These cunts are as much use as a chocolate fire guard, a veritable mix of cluelessness and idiocy, of complacency and arogance, and of theiving and conniving the rest of us.

When the time comes shit-cakes, you will wish you had never been born.  people like me first off do not forgive, and certainly do not forget.

I despise these fuckers with a passion verging on rage.

Wed, 05/01/2013 - 12:57 | 3518538 Its Only Rock N Roll
Its Only Rock N Roll's picture

ummmm Kevin, you are clearly off the script we provided you

why do we bother writing a script if everyone doesn't stick to it!!!

Wed, 05/01/2013 - 16:12 | 3519537 GottaBKiddn
GottaBKiddn's picture

Kevin has clearly forgotten that Mr. Ben has "plenty of tools" in his toolbag. Going off script could get a guy an early end, unless of course, Kevin is being used to break it to the public that maybe those tools don't really exist, and perhaps we need yet another Chairsatan who really knows what to do. As in, the next Chairman?

Wed, 05/01/2013 - 13:01 | 3518548 Sleepless Knight
Sleepless Knight's picture

Of course there's a Plan B - every 15 year old knows that.

Wed, 05/01/2013 - 13:02 | 3518549 yogibear
yogibear's picture

More people on Food stamps, illegals flooding into the US for free welfare, more disability,  free rent, free healthcare and cell phones.

All in Mexico, South America and Europe, come to the US for freebies!

Until the US printing and spending scheme blows.

I see so many illegals pulling out their medicaid cards. They also collect welfare. With Amnesty more will pile into the system.


Wed, 05/01/2013 - 13:02 | 3518552 e_goldstein
e_goldstein's picture

"...and the bank's most important asset--credibility--is under attack."

Bah ha ha. Fuck, these FED guys are funny. They should all go on a comedy tour (and never come back).

Wed, 05/01/2013 - 16:08 | 3519523 Nick Jihad
Nick Jihad's picture

Indeed. How can anyone question the Fed's credibility?  I believe beyond any shadow of a doubt, that they will print forever, or at least until hell freezes over.

Wed, 05/01/2013 - 13:06 | 3518574 sunriseL
sunriseL's picture

A nation can survive its fools, and even the ambitious.  But it cannot survive treason from within.  An enemy at the gates is less formidable, for he is known and carries his banner openly.  But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.


For the traitor appears not a traitor; he speaks in accents familiar to his victims, and wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of men.  He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.  A murderer is less to fear.


-Marcus Tullius Cicero

Roman orator, statesman 42 B.C.

Wed, 05/01/2013 - 16:14 | 3519536 Nick Jihad
Nick Jihad's picture

How is this relevant?  Nobody is a traitor, neither in the Fed nor the Treasury. Bernank, Timmeh, Lew, etc, are the "fools" and "ambitious" that Cicero was referring to, but not traitors. The only thing that makes them dangerous, is that they are convinced that they are doing the right thing to save the nation.

Wed, 05/01/2013 - 20:54 | 3520632 bunnyswanson
bunnyswanson's picture

Maybe this is the goal - destroy local currencies in order to issue one from a global central bank, which is informally what is already is.

In above clip, at 50 minute mark or so:  "New World Currency Policy is something we need to talk about."

This is stating the obvious.  There are records that will be kept and those who are considered above the rest would be surely colluding or actually ill informed to not notice the very things being discussed on the internet by millions of people every day.


Wed, 05/01/2013 - 13:05 | 3518578 Race Car Driver
Race Car Driver's picture

> The Fed has "enabled" Washington to do nothing, since the politicians expect the same "rabbit out of the hat" rescue that occurred in the darkest days of the financial crisis.

Rabbit-out-of-the-hat - bullshit. There wasn't any fucking magic - Hank Paulson threatened martial law with tanks in the streets unless the broke-ass banks got bailed out with taxpayer dough. Now we're throwing 85B a month at them and they just want and need more. More isn't working, so it looks like tanks in the streets it is.

Wed, 05/01/2013 - 13:08 | 3518584 Rathmullan
Rathmullan's picture

Yeah but the fed is on record as saying the fiscal stimulus can't last forever but neither should it be pulled away too quickly (at least not till the fomc committee members get their bunkers built in Grenada).

Where's Banzai's cartoon of a thumb sucking chuckie schumer hanging on to his mommy's apron string while whimpering that "the fed's the only game in town" 

What a disaster waiting to happen while the cokehead/johns at wall and broad only know that market pricing suppression (oppression) make stocks go higher.

Wed, 05/01/2013 - 13:06 | 3518589 IridiumRebel
IridiumRebel's picture

oh come on! These assholes got all of the answers. 

OT: Where has LongSoupLine been? I miss his rants. He must have been arrested. 

Wed, 05/01/2013 - 13:11 | 3518595 buzzsaw99
buzzsaw99's picture

if he was honest he would say the fed doesn't give a fuck about anyone but themselves

Wed, 05/01/2013 - 13:09 | 3518597 madcows
madcows's picture

I thought they just made Plan B available to 15 year olds without parental or doctor consent.  What is he talking about, "No Plan B"?

Wed, 05/01/2013 - 13:12 | 3518598 dognamedabu
dognamedabu's picture

...It is not bad luck that is creating this medicority, it is bad policy

Hello? Hello?? Ya think?

They will say they couldnt have stood by and do nothing but that is exactly what was needed. This commie style intervention has shown a few good men are complete fucktards. If it was all allowed to collapse when it did we'd be well on our way to growth. The only thing these dicks saved were themselves.

Wed, 05/01/2013 - 13:13 | 3518604 Everybodys All ...
Everybodys All American's picture

Everyone else is afraid to say it, but I will. The big elephant in the room, the reason the economy can't grow, is because there is a Marxist in the White House.

Wed, 05/01/2013 - 16:16 | 3519559 Nick Jihad
Nick Jihad's picture

While I agree, it's not exactly because he's a Marxist, but because he stands ready to veto any attempt to reform Obamacare. If you thought that ending the 2% payroll tax cut last January was an "economic headwind", just wait til Obamacare kicks in full-force in January 2014.

Wed, 05/01/2013 - 13:13 | 3518607 The Dancer
The Dancer's picture

I wouldn't joke about's all possible these days...and the main stream is out of excuses, so they now steal ideas from ZH for pitiful they truly lolo

Wed, 05/01/2013 - 13:16 | 3518618 Rathmullan
Rathmullan's picture

Are you saying that a policy that quashes any and all risk premia is actually risky in and of itself? Well lions and tigers and bears!

Wed, 05/01/2013 - 13:14 | 3518622 eclectic syncretist
eclectic syncretist's picture

Since the purpose of a central bank is to allow the banksters to siphon from the economy, maybe the best answer, if the goal is truly to stimulate the economy, is to get rid of the central banks!

Wed, 05/01/2013 - 13:14 | 3518623 Yen Cross
Yen Cross's picture

     There's a large swath of the world that's already pissed off at Bernankes money printing antics. If he increases the printing he has that to deal with abroad.

     The real caveat will be even more commodity inflation and higher prices domestically. People are fed up with this won-ton printing BS.  99% of the population has been fleeced by the Fed. and the disparity between the haves and have nots, is blantantly obvious.

Wed, 05/01/2013 - 13:22 | 3518655 Everybodys All ...
Everybodys All American's picture

The rock and the hard place. Fuck Bernanke and his thesis on the Great Depression. He get's an F in the real world.

Wed, 05/01/2013 - 13:22 | 3518669 Yen Cross
Yen Cross's picture

    And in life...

Wed, 05/01/2013 - 13:20 | 3518644 francis_sawyer
francis_sawyer's picture

There is no 'Plan B' [because there is not a plan in the world that exists that DOESN'T asymmetrically cause the juice to take a full force body blow]...

Wed, 05/01/2013 - 13:26 | 3518647 Kirk2NCC1701
Kirk2NCC1701's picture

"No Plan B" = Complexity Theory and Stochastic (actuarial or Monte Carlo) modeling makes outcomes more difficult to predict.  But they will likely land in one of the 4 'buckets' that Jim Rickards alluded to in his recent speeches:

   1. A Basket of Reserve Currencies.  Anchored in gold (or PM), at reserve ratios TBD

   2. USD re-anchored to gold (or PM), at reserve ratios TBD

   3. IMF's SDR money.  Anchored in gold (or PM)?  At reserve ratios TBD

   4. Chaos

I fear #3 more than #4, because the former will bring more pain and debt-slavery in the long run.  Chaos will lead to re-org and healing. 

Come to think of it... I see a premeditated MAJOR WAR as Outcome #5.  This might give the USD/FRN longer legs.  Recall that both military and currency wars are still wars, and wars are "diplomacy by other means".

Plan & 'invest' accordingly.

Wed, 05/01/2013 - 13:20 | 3518658 the not so migh...
the not so mighty maximiza's picture

(opens window, jumps out of first floor window)

Wed, 05/01/2013 - 13:28 | 3518686 Cursive
Cursive's picture

"....former Fed Governor...."

Wed, 05/01/2013 - 13:31 | 3518717 Dadburnitpa
Dadburnitpa's picture

So this is a big deal because he's a suit and spoke these words in a public forum? He must be bucking for Captain Obvious.

Wed, 05/01/2013 - 13:38 | 3518758 Downtoolong
Downtoolong's picture

I can't help but notice how all these people wait until they are out of office to admit the truth.

That's as good a reason as any to remove the ones who are in office right now.


Wed, 05/01/2013 - 13:42 | 3518775 Rathmullan
Rathmullan's picture

Oh, there's always been a PLAN B: Go back to princeton.

Wed, 05/01/2013 - 13:43 | 3518780 Alex Kintner
Alex Kintner's picture

So then there's no way to abort this shitty economy? Perhaps a huge coat hanger.

Wed, 05/01/2013 - 13:52 | 3518799 ebworthen
ebworthen's picture

" such a lonely word..."

Billy Joel:  "Honesty"

(opens in new window/tab)

Wed, 05/01/2013 - 13:50 | 3518802 Diesel Seven
Diesel Seven's picture

Awww. . . don't worry, be happy, buy stocks. Can't you see Janet coming aboard as Fed Chair dressed  in a cheetah thong bikini riding the printing presses 'til the cows come home. Ewwww . . .

Wed, 05/01/2013 - 14:03 | 3518847 More_sellers_th...
More_sellers_than_buyers's picture

THIS IS WHAT IS WRONG WITH AMERICA!!! No real thought. Our entire society is "cover your ass"Why do what is right when everyone will hate you when you can do what you know is wrong and everyone will pat you on the back and say"what a great guy" PATHETIC . No one with any NADS.  America always had morons, but they didnt run the place. In circles of power they were laughed at. Once the morons figured out the only way to get respect is to get political power it was game over.  

Wed, 05/01/2013 - 14:23 | 3518989 ShorTed
ShorTed's picture

"America always had morons, but they didnt run the place."  Beautiful, says it all.

Wed, 05/01/2013 - 14:08 | 3518873 Toolshed
Toolshed's picture

I don't know who he is, but the host refers to him as Jim. He speaks shortly after Mr. Walsh's comments at 36:30. Well, Jim is a shit talking douchebag, and looks the part. He defends the fed's efforts and talks up job creation and how we have gotten over half the lost jobs back and what a swell job the fed has done on unemployment. What the tool fails to mention is that the jobs gained are mostly minimum wage bullshit jobs taken primarily by older folks that would be retired if they could afford it. What a egg sucking weasel fuck. Who is he? He needs to be on "The List".

Wed, 05/01/2013 - 14:12 | 3518905 polo007
polo007's picture

Former Federal Reserve Governor Kevin Warsh said the central bank will probably press on with its “aggressive” easing as growth this year may fall short of the pace needed to put millions of Americans back to work.

Job growth requires a 3 percent to 3.5 percent expansion that won’t be in reach for the world’s largest economy this year, Warsh said today in a Bloomberg Television interview at the Milken Institute Global Conference in Los Angeles. Policy makers probably will maintain their current stance, he said.

“For those that don’t have jobs, it looks to be an increasingly difficult trek to find employment in an economy that’s growing less than 2 percent,” said Warsh, now a lecturer at the Stanford University Graduate School of Business in Stanford, California. “We’re now four, five years into a very disappointing recovery and I wish I could tell you this will be the year it breaks out to the upside but it won’t.”

The U.S. economy expanded less than forecast in the first quarter, increasing at a 2.5 percent annualized rate, the Commerce Department said last week. The gain followed a 0.4 percent fourth-quarter advance, and compares with a 3 percent median estimate of economists surveyed by Bloomberg.

“This economy has now been so weak for so long that we’re probably doing structural harm to the economy,” Warsh said.

Wed, 05/01/2013 - 14:18 | 3518969 ShorTed
ShorTed's picture

I appreciate the fact that Warsh exposed the "wealth effect" that Krugman and sundry sycophants adore as just another form of the hated Reagan/Stockmans trickle-down theory.

Hypocrisy rules

Wed, 05/01/2013 - 14:36 | 3519068 dolph9
dolph9's picture

Notice how all of the former guys who have long since left come out of their caves to give useful criticism to the people having to improvise their way through the collapse.  They may be right, but it's sort of like "thanks alot but you can go back to the golf course now."

It's all about who gets left with the shit sandwich!  Yes that is America, learn the lesson well.  Bush's only job was to leave the shit sandwich for Obama, whose only job in turn is to leave it for somebody else.  Bernanke's only job is to leave it to whichever idiot chooses to follow him.

In medicine we refer to this as turfing the gomer.  Gomer refers to "get out of my er" from a book called The House of God, written awhile back.  A gomer is an elderly, demented patient who is dying, but you aren't allowed to let them.  Nobody wants to get the gomer.

Wed, 05/01/2013 - 14:32 | 3519069 sschu
sschu's picture

We of course do not want to let the Fed etal off the hook as they have been complicit in the created mess, but clearly the problem is an over-reaching and highly inefficient/ineffective government.  At all levels, especially the Federal level.

But Bennie decided to play along, because he wanted to keep his job and it enriched his friends.  So there is plenty of blame to go around.

So here we are, the ACA looms, Dodd-Frank did nothing to fix the financial risks, we have 2-3 more asset bubbles now close to popping (education, bonds, government, west coast housing), we now "own" $3T in non-hedged bonds ready to blow sky high, QE, ZIRP and no real fix in the employment picture.  What have we received for the expansion of the money supply?

The Mises quote about only two paths for a credit expansion, hyperinflation or deflationary depression are the only options.  


Wed, 05/01/2013 - 14:40 | 3519106 DrData02
DrData02's picture

Bernanke "good intentions"???????    BS.

For the banksters bank accounts.  He doesn't care that Grandma is starving.

Wed, 05/01/2013 - 14:56 | 3519190 dognamedabu
dognamedabu's picture

There is no plan B. But there is a plan H which entails all of us who are in the know get to save our asses.

Wed, 05/01/2013 - 16:02 | 3519503 I am a Man I am...
I am a Man I am Forty's picture

as the drug dealer says to the junkie

Wed, 05/01/2013 - 19:10 | 3520246 SKY85hawk
SKY85hawk's picture

-           The effectiveness of monetary policy was last discredited in the 1970s. The persistent attempts to revive growth with easy money led to stagflation.  The real world has turned to be opposite to the favored positions of the economics profession: the financial market is not only inefficient but systematically bubble-prone. 

Trying to bring back yesterday through monetary growth will eventually bring inflation, not growth.  This is what the Gov’t wants in order to ‘pay off the Debt’. 


Who remembers the 70's? 

It was a time of Stagflation.

The 'Bob Hope" generation entered their 'spend less-save more' life stage.  OUR Parents!

It should be clear that the baby-boom is in the same life-stage.

Not one Politician will admit they are helpless to restart Economic Growth! 

They will wait this thing out, just like before.

We must demand cuts in Government spending, to match cuts in government revenue.

Anyone who can suggest how to elect political representatives that don't have to BUY votes by SELLING favors would do a really good thing for the world!


Wed, 05/01/2013 - 20:40 | 3520577 No More Bubbles
No More Bubbles's picture

BLAH BLAH BLAH!  All these worthless fuckers should be GUILLOTINED! 

Thu, 05/02/2013 - 14:13 | 3523266 papaclop
papaclop's picture

Krugmoron says we have no inflation. Is he trying to suck his way into Banana Ben's job or is he really that stupid? Maybe he can set up that alien invasion so we can "End this depression NOW!". If you liked Harry Potter you might like Krugmoron's book. Or not.

Thu, 05/02/2013 - 14:14 | 3523275 papaclop
papaclop's picture

Krugmoron says we have no inflation. Is he trying to suck his way into Banana Ben's job or is he really that stupid? Maybe he can set up that alien invasion so we can "End this depression NOW!". If you liked Harry Potter you might like Krugmoron's book. Or not.

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