Volcker On Bernanke's Grand Monetary Experiment: "Good Luck In That"

Tyler Durden's picture

A week ago, in a very comic interlude, the hawkish head of the only G-7 country to have experienced hyperinflation in the recent past - Bundesbank's Jens Weidmann - had some sobering words of encouragement for his Japanese colleague Kuroda: "I wish them luck in their experiments."

Now, another former central bank head, the most famous one of the 1980s, and the man thanks to whom America did not implode in a depressionary puff of runaway inflation, Greenspan's predecessor Paul Volcker, has taken the podium and made a mockery of the entire fallback premise on which Bernanke's house of manipulated, centrally-planned cards is built: his assumption that no matter how much deferred inflation is injected, that Bernanke needs just "15 minutes" to take it away. Better yet, and as Japan has recently seen: the fact that central bank credibility is slowly but surely starting to slip away - first visible in rapid rises in bond yields, then in a surge in bond volatility, and finally: an all out inflationary conflagration.

Quote Volcker:

The Federal Reserve, any central bank, should not be asked to do too much to undertake responsibilities that it cannot responsibly meet with its appropriately limited powers,” Volcker said. He said a central bank’s basic responsibility is for a “stable currency.”


“Credibility is an enormous asset,” Volcker said. “Once earned, it must not be frittered away by yielding to the notion that a little inflation right now is a good a thing, a good thing to release animal spirits and to pep up investment.”


“The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives,” according to Volcker. “Up today, maybe a little more tomorrow and then pulled back on command. Good luck in that. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.

Hopefully Volcker can be cryogenically frozen because when the Chairsatan eventually - and it is only a matter of time - loses control and all hell breaks lose, none of the muppets in the Marriner Eccles building, no click-baiting Nobel-winning trolling Op-Ed writer with socialist delusions of grandure, will have any idea what to do, and it will be someone like Paul who will be needed to unleash his magic once more. Sadly, we have the sinking suspiction that not even thawed out of carbonite, will Volcker have any success when faced with the Frankenstein monster that the MIT central-banking braintrust have managed to unleash.

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ghandi's picture

Cage match Volcker vs. Bernanke!


Volck 'em up!

ACP's picture

He's like 6'7", so I'd really like to see him stomp Bernanke's brains out...literally.

eigenvalue's picture

Bernankes is a PhD, one of the smartest people. Those gold pumper and dumpers, like Jim Sinclair, don't have such qualifications. Ergo, we should trust Bernanke!

Gold and Silver to ZERO!!!

Muppet Pimp's picture

Tall Paul's still got it :)

ZerOhead's picture

Paul Adolph Volcker, Jr.[1] (born September 5, 1927) is an American economist. He was Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987.

.[4] Volcker grew up in Teaneck, New Jersey, where his father was the township's first municipal manager. As a child, he attended his mother's Lutheran church, while his father went to an Episcopal church.

Can you spot the 4 reasons why they will never let this man back into the helm of the Federal Reserve?...

(Hint: One is his age...)

grid-b-gone's picture

The chances of Carter appointing another Fed Chairman are slim. I doubt he can beat Hillary in the primary.

newengland's picture

His mother was jewish of Ashkenazi origin. Volcker's tribe will humor him while testing others who they place in his stead.

They trynna catch me ridin dirty's picture

Schopenhauer said that we get our intelligence from our mother and our character from our father. German character is probably what kept Volcker honest.

Colonel Klink's picture

Hahahaha, Zerohead, do a bit more digging in his past.  He's a tribal member.  The rest is a religious beard.


Just state'n da fax.  Don't ban me bro!

SAT 800's picture

Jim made an honest living working every day, for years in the Gold Mining and Marketing industry itself; instead of sucking off the taxpayers tit all his life and never learning anything about reality like our princess from Princeton; Ben Shalom Bernunclehead.

ponzisaurus's picture

With the capital controls in effect via crimex gold and silver are effectivley at zero now at current spots so you are wrong, not to zero AT zero now!  Eigen I get a bit of a synthetic feel from you are you organic?  It would be a great acomplishment for you to openly admit you are a computer program.  Perhaps created by APMEX as a shill for PMs judging by the sheer stupidity of your arguments? Prove to me you are human.

ZerOhead's picture


I'll take all I can get...

BeanusCountus's picture

The PHD's have gotten us to where we are. I'd prefer a couple community college guys be put in charge for a while. How much worse could they do?

They trynna catch me ridin dirty's picture

I have shredded people with Ivy League BAs, JDs and PhDs.  Ivy League BAs are basically Jon Stewartites while the JDs and PhDs are more like Krugmans.  You'll hear nothing from them that you won't see in a more or less dumbed down form on HuffPo.  Yawn.

Meatballs's picture

JD's are a favorite snack of mine as well :) Mba's too.

BeanusCountus's picture

I have no doubts that you shred em. Been around a long time. Had to explain tax law to JD's on numerous occasions. Idiot convention x 10. And the stuff bores me to tears. Makes little sense, but it is what it is. And at the end of the day, I consider my knowledge a waste. Rather be a good fisherman. And a good dad. And a soccer dad is not what I have in mind.

asteroids's picture

Eigenvalue is a moron. The only thing the PhD's have done is to destroy the dollar, yen, euro, etc... You gotta remember that this debt must be paid off or written off. That's someones blood, sweat, and tears. Untold millions will suffer for the last 5 years of stupidity and greed.

reTARD's picture

Nooooooooooooo!!! LOL

ACP's picture

Someone change the top line of Bernanke's next speech to:

"I am we Todd did. I am sofa king we Todd did."

Ah, oldies but goodies...

bank guy in Brussels's picture

Other news about Volcker, is that he has become a US Government Oligarch Absurd Senile Shill ...

85-year-old Paul Volcker, was not only US Fed Chief 1979-87, he is also ...

Honorary Chairman of the super-creepy globalist Trilateral Commission (!) co-partner of the Bilderberg Group

And for those illustrious globalists

He has set up a 'Volcker Alliance' to try to restore 'trust in US government', worried about 'recent controversies' with the IRS and US Justice Dept etc.

Volcker wants to create a new marketing strategy to make people 'Believe in America' again

Jim Sinclair is, sadly, Volcker's old buddy, but even Sinclair seems to be sneering at him now


ACP's picture

Nothing in that had any marketing, but research on improving policy.

Edit: A man is defined by his actions, what actions do you disagree with?

In the US now there is only worse, worser and worsest. I pick worse over the latter two.

StychoKiller's picture

I seem to recall that after Volcker jacked interest rates to 20%, they stayed there longer than 15 minutes, so The Bernank is talking through his hat!

Hedgetard55's picture

Bernanke is the God Emperor of Finance. He WILL see us through, bitchez.

akak's picture

Indeed he will --- right through the destruction of the US financial system, the US economy, and the US dollar.

Antifederalist's picture

John Law, Von Havenstein, Ben Bernanke.

I'll take Famous Economic Charlatans for $1,000 Alex.

Duffminster's picture

The way its working now, the velocity of money is dead.  I believe the Fed is fully aware that it can not taper as the underlying economic data simply isn't showing growth.  I only wonder if the Fed will turn to by the the Japanese Bond market to avoid global volatility especially when consdiering that the chances of Congress passing a budget much less raising the debt ceiling seems increasingly unlikely and the supply of treasuries seems to be diminishing. 

The news in regard to the EU's position on "tapering" re-hypothecation seems as germane as anything, if only as it raises awareness of the underlying perils that the immense levels of re-hypothecation imply.

As for tomorrow, and Friday, do we get a ramp?  I would think only if GDP comes in at concensus or better.  Didn't one Fed member state that the Fed's participation in stimulus might be up or down depending on economic data.   When I look at the underlying economic data, not that reported by the government, I don't see growth. 

In any case, if Japan and Europe do allright, I am guessing, betting that is, that the markets will rally Thursday and especially Friday.  I am wrong so often that you should probably just bet the opposite of whatever I am doing.  None the less, I would love to hear guesses, speculations and so forth as to what happens in the S&P the next few days and whatever crazy theory you might have.  I've been a gold bull and market bear for so long it may be time that I just stay with that position.  Just for the record, I'm long short term just based on the likely spin on GDP (and revisions).  Why do I get the feeling I'm about to get smashed again?   Anyway, comitted for the moment.  Technicals say market top but recent history says technicals and even common sense don't matter any more.


Duffminster's picture

Found the quote. Not much attention paid to the "up" aspect of this quote in the MSM or elsewhere.  From Reuters:

"...The Federal Reserve will not hastily withdraw its policy stimulus for the economy, a senior central banker said on Thursday, while another stressed that it could adjust the pace of bond purchases both up or down according to the data...."

SAT 800's picture

Maybe we should send him one of those gay butt plugs for Christmas, then he can see how much taper he can take.

lotsoffun's picture

are you joking?  flirted with big down - closed down 1/2 that, it's a dip!!  tomorrow, more promises of printing.  and then going into a weekend of news articles of more printing.  and then tuesday - EIGHTY tuesdays in a row GREEN print.

markets only go one way.  up.


forwardho's picture

Sir Issac Newton would beg to differ.

lotsoffun's picture

mr. newton was also the first exchequer of the bank of england, surprisingly.  physics and market prices are not the same thing.

it's cute to say what goes up must come down - but look at the value of the us dollar over the last 100 years.

and my waist line and my hairline.  sure - it goes down - but that's when they close the lid on the coffin.


Scro's picture

Isn't Friday a POMO day?

centerline's picture

+1.  Virtually everything else is heading for a total wipeout at this point.

akak's picture

With that combo, you might want to go long toilet paper too.

ziggy59's picture

At least a good air freshner, maybe Beano

seek's picture

I think Volcker understands just how fucked we are. My guess is after the 2008 fiasco where they used his name and put him in a corner, he'll say no if invited to fix things.

If he is invited to fix things, I think the fix will be to let it blow up, then rebuild on a sturdier foundation. As soon as he shares the method of repair, he'll be asked to resign and the blow up happens anyway.

Duffminster's picture

Funny.  Yeah, I don't think they'll be inviting him to "fix things".  The fix is already in.  Personally, I believe that because we are beyond the point of no return, the Fed just keeps increasing QE, war breaks out, and all hell breaks loose.  At least that way, there is time for the Oligarchy to role into gold before all is said and done.

lotsoffun's picture

i wish i could post this everywhere, everywhere, a million times.  at that point where people are looking at empty bank accounts and retirement funds because they pumped all the money into equities and the ones that didn't are looking at $$ in money markets worth nothing and the ones that bought deflationary assets like homes, because housing is 'fixed' will all be pointing at bennie boy bernake (big bad bama gets off because he will claim he was never a money guy, and he left it all to the princeton prof. with his noble prize friend at the ny times).  bennie will simply say what really is the truth - i did everything i could to help blow the bubble up and make you rich, and if you were too stupid to get out on top - when you could have truly been rich, than i can't help you now. you should have known this doesn't last forever.

it's just that simple.


SAT 800's picture

Volcker is a personal hero of mine; I was there and watched him force the government to pay-out money to bond holders in order to buy back credibility. You do remember he was hung in effigy on wall street? But; it's too late.

Jena's picture

Paying bond holders?  Such an old-fashioned sentiment.





PKF's picture

I liked Volcker as well....getting 15% while taking little to no risk.  Bernanke will end us.   

mkkby's picture

Yes, and when his grandson got a wall street job a few years ago Volcker told the young man, get an honest job.

orez65's picture

See what happened to Apple iBonds with a slight rise in interest rates.

See what'll happen to the bond market if interest rates really go up:


observer007's picture

Re: Liberty Reserve, Bitcoin

The feds stamp out innovative currencies that threaten their financial control


malikai's picture

Not sure. LR had their hands in some pretty stinky pies.

The guys had prios stateside for M/L and did time a while back for it.

But I'm just curious, when does HSBC, Goldman, etc get raided?

Aurora Ex Machina's picture

If you reply to this shitty poster, you're getting fingered.