This page has been archived and commenting is disabled.
Fed's Bullard Explains His FOMC Dissent: Disagrees With Tapering In Light Of Deteriorating Economy
As noted previously, in the latest FOMC decision the St. Louis Fed's James Bullard joined the ranks of the dissenters currently held only by Kansas Fed's George. Today he explains why: it appears that he had an issue with what most have already pointed out: the Fed's lowering of its economic forecasts, even as it represented a "tapering" of monetary injections. To wit: "The Committee was, through the Summary of Economic Projections process, marking down its assessment of both real GDP growth and inflation for 2013, and yet simultaneously announcing that less accommodative policy may be in store." In other words the debate can end: Bernanke did signal tapering.
From the St. Louis Fed
President Bullard’s Comments on Recent FOMC Actions
ST. LOUIS – Federal Reserve Bank of St. Louis President James Bullard dissented with the Federal Open Market Committee decision announced on June 19, 2013. In his view, the Committee should have more strongly signaled its willingness to defend its inflation target of 2 percent in light of recent low inflation readings. Inflation in the U.S. has surprised on the downside during 2013. Measured as the percent change from one year earlier, the personal consumption expenditures (PCE) headline inflation rate is running below 1 percent, and the PCE core inflation rate is close to 1 percent. President Bullard believes that to maintain credibility, the Committee must defend its inflation target when inflation is below target as well as when it is above target.
President Bullard also felt that the Committee’s decision to authorize the Chairman to lay out a more elaborate plan for reducing the pace of asset purchases was inappropriately timed. The Committee was, through the Summary of Economic Projections process, marking down its assessment of both real GDP growth and inflation for 2013, and yet simultaneously announcing that less accommodative policy may be in store. President Bullard felt that a more prudent approach would be to wait for more tangible signs that the economy was strengthening and that inflation was on a path to return toward target before making such an announcement.
In addition, President Bullard felt that the Committee’s decision to authorize the Chairman to make an announcement of an approximate timeline for reducing the pace of asset purchases to zero was a step away from state-contingent monetary policy. President Bullard feels strongly that state-contingent monetary policy is best central bank practice, with clear support both from academic theory and from central bank experience over the last several decades. Policy actions should be undertaken to meet policy objectives, not calendar objectives.
While President Bullard found much to disagree with in this decision, he does feel that the Committee can conduct an appropriate and effective monetary policy going forward, and he looks forward to working with his colleagues to achieve this outcome.
»
- 9895 reads
- Printer-friendly version
- Send to friend
- advertisements -
Hey wit a name like bullard, what's not like?
how is it that all these "experts" like scientists, economists and doctors have done so much to fuck up this planet up by subverting the natural forces of the creator? it's called "markets" bitchez. leave them the fuck alone.
Just one more little tweek......and everything will be just fine.
Federal Reserve is an example of Dumb and Dumber and Dumberer and Dumberererer....
Once you make the decision to BECOME the economy... You can't 'UN-BECOME' it...
Yes you can. When the time arrives that the truly filthy rich decide that they have had enough of the wannabes, then you can unbecome the economy, and cut the throats of your up and coming competition.
And by the way...this has not a thing to do with the economy, anyway.
Your last sentence is true... My statement is more of a comment of my interpretation of their own version of their own illusion... & frankly ~ I care about as much of 'their version of their illusion' about as much as I do about the plight of a cast of characters on any given Oprah or Jerry Springer episode...
Bullard is throwing his hat into the race for the chairmanship by showing that he can be a trustworthy waterboy.
Bullard says something that any ZHer can agree with: the economy is tanking. His dissent is justified.
Bernanke is pushing discussion of tapering before his tenure ends as pure career move.
This cannot be. CNBC has assured us that the economy is robust and well on its way to a full recovery. Perhaps Bullard is just not watching enough gov't approved TV.
Up his dose.
Or better yet, cnbc is only talking about their economy and then relating that to the U.S. economy.
How can anyone not think after five years of this zero interest rate policy that their policies are the cause of our ongoing economic problems and can no longer represent a solution?
Bernanke has proven his doctorate thesis was a fraud in real time and in the real world.
Bernanke is pushing discussion of tapering before his tenure ends as pure career move.
Absolutely. That is spot on Slaughterer
Bollard should change his name to Bollocks
The Bernank veiled threat: You bitch about QE, lets see how the market handles the mere rumor of ending QE. Are you sure you want me to end QE?
Bernanke the shooter. Shot his mouth off to annihilate the longs on margin. That would be all our savings funds managers using our retirement funds on the other side of the bankers. Shot us to pieces. Fuck you Bernanke.
1% inflation is ABOVE target... that is not STABLE inflation, which is the mandate.
As for REAL inflation.... for things that you need, and not excluded stuff you NEED like food
The fed doesn't give a damn about price inflation, the gubbermint can lie about that. All they care about is the long-short spread. Bankers have been plundering loan loss reserves and Dimon needs another bonus so trading volume and the long-short spread must go up but not enough to piss off the CONgreff. Never forget who really runs the fed, and it ain't the bernank.
Actually the FED dual mandate requires a positive inflation rate target close to 2% to be achievable, as stated by the Chaisatan himself. We all know that both the CPI and the PCE are rigged, but the point that Bullard makes is completely in line with the logic that the FOMC should have applied. In other words, after the President fired him on air, Big Ben has lost his soul and betrayed his own doctrine.
All these statements are designed to increase trading volume and nothing else. The bond market is rigged, the fed sets the price and always will.
the whole thing is riged and the market this am proves it all over again. This selloff may not be over, but it's a horseshit selloff.
As for Bullard, I am glad he is pointing out the obvious deflation we are all suffering from. Godspeed to him and may the fed regain their focus on fighting deflation for us by giving money to banks.
"by giving money to banks..."
~~~
curse those stone buildings!
Wondering when these people will understand that even a 2% inflation target with growing underemployment means a declining living wage and a collapsing revenue stream in real terms.
Naw, that would mean they would have to pull their faces away from those models for once.
Cargo Cult economics...a room full of witch doctors arguing about how long to leave the leaches on the patient.
Well GD, what is it, deteriorating or recovering like the MSM claims???????????????
Refer to the "Swirlogram" for the answer (deteriorating).
Bullish ... for Gold ... long term. Just stack, it's that simple.
Better raise the margins....cause everyone is going to want that crap.
All this talk of tapering might just be directed at slamming gold down one more time to load their boats as much as they can before they finally let it turn around. The whole tapering at this point makes no sense
1. China is in deep trouble. They are going nowhere and their financial system is under extreme stress. When their housing bubble explodes it will make the 2008 US housing crisis look like a walk in a park. Chinese are no fools. This is why they are hording so much gold.
2. Europe... Well, last data show car sales at a 20 YEARS LOW!!! The Deutsche Bank looks ready to receive a Bail-In (amongst other banks), Peripheral Eurozone is going down the toilets, France is about to join the PIIGS, and Greece needs... a NEW Bail Out! (Who would have guessed?).
3. The US deficit will likely be around 900 billion this year (despite the CBO pretending it will be only $642 billons!).
4. In last April, international investors and Central Banks dumped more US treasuries than the Fed monetized during that month (that was the month when tapering talk was just starting). Who wants to hold enormous quantities of toxic US treasuries when international trade is increasingly moving away from the USD and the Fed gave the official signal that the 20+ Bond rally is over???
5. Interest rates went up by 50% in the last 2 months only! That trend is only starting. How will the fragile housing market respond to that? Higher rates will not only put a drag on the US economy but will also make any new debt issuance more expensive for the government. More drag on economic growth due to higher interest rates and higher government borrowing cost = ????? Bingo: Higher deficit!
6. And all this comes at a time when the budget sequester already imposes government spending cuts and higher taxes. So tapering means double down on economic drag at a time when the world economy is dangerously slowing down.
I don't know but I think that the growth assumptions of the Fed are way overly optimistic and certainly don't reflect the general weakening of the world economy.
So it sounds like a lot of cheap talk to push gold as low as they can so they can cover more of their shorts and restock some of the leased gold before it really takes off to the upside. Remember, the last Bank CoT report shows that the Bullion banks are NET long for the first time since 2008 if I am not wrong.
Finally, if the price of gold goes to $1,000 an ounce, then a significant part of the world mining production will be shut down. What will that do at a time when world demand for gold is at its highest ever? They won't be able to keep gold this low for very long. The distribution pipeline is already stretched very thin and dry. I give them just a few more months. Let's see how higher interest rates will affect consumer spending, the housing market, business investment and the issuance of new treasuries at higher rates (meaning higher government spending on the service of its debt). The real effect of all that should start to show up within 3 to 6 months, or better said, before year end when tapering is supposed to come into effect.
I still have a question: Why is the USD going up at this point?
1. Is it the reflection of a sudden increased confidence in the US economy that reflects investors’ willingness to invest in the USA? Well, Equities and bonds are plummeting... That reason doesn’t make much sense to me.
2. Is it due to a temporary effect induced by the rapidly unwinding of the cheap dollar carry trade in emerging nations? The Thai Bath is quickly weakening as investors are pulling out of the Stock Exchange of Thailand and short term Thai securities of all kinds. In the newspaper today I was reading that authorities in Thailand are expecting further weakness in the Thai bath as only half of the “recent hot money” had pulled out from Thailand. Ok, so maybe we can give it one more month before all the “hot money” pulls out and goes back to either Japan or the USA. Then what happens to the USD as the huge carry trade “temporary effect” is off the table? Should we expect the USD to resume its downward trend by then?
3. What is the net effect of international investors dumping US treasuries at a faster rate than the Fed Monetizes? Shouldn’t this weaken the USD?
Am I missing a point? I’d appreciate If you guys could help me understand what is happening here.
Eric
dollar [apparent] strength = liquidation of other leveraged paper 'assets'... nothing more, nothing less... It's like peeing in a jar if you can't make it to the toilet...
~~~
KING DOLLAR is about the stupidest [most brilliant] slogan the hucksters ever came up with...
So basically what you're all saying is everything is really screwed up......OK.....got it.
Thanks, it goes along with my understanding of what's going on.
Let me put it to you another way... In a [more sensible] parallel universe, these leveraged paper assets could be 'redeemed' into something else... But as we all know... 'GOLD ISN'T BACKED BY ANYTHING'...
~~~
http://www.youtube.com/watch?v=c9IkX3oJipo
Why that woman isn't the spokesperson for CNBC is beyond me.
Thanks for a good laugh! Priceless video on how cheap grade MSM puts the sheeple as sleep.
It might be the only bright side of all this for me who has nothing but is headed over the pond in Fall so I'm all for a gigantically huge dollar with which I can buy a shit ton of euro and enjoy myself while in Europe. Unfortunately I doubt it will go low enough to make that much of a difference.
I'm thinking I need the dollar buying about 1.5 euro or a complete 180 from where it is.
I hope you don't plan on driving anywhere or you'll end up blowing it all on $9 a gallon gas & toll roads...
1. China is more than fuct. It's doomed. You think we have a demo problem? We juts have to feed a bunch of retired, dying folks. They have to employ hundreds of millions of young people and they won't be able to keep up. Game over.
2. Europe? Hahahahahahahahahahahahahahahahahahaha. France is over. That leaves Germany. They could mint up a bunch of solid gold Dmarks and rule the world but thye won't. Hence the run to the only perceived safe haven ... USD.
3. The US deficit 900 billion? Don't make me laugh. Just more creative accounting from the Bureau of Lies and Misinformation. It will be "revised" at some later date to 1.2 - 1.5 tril. Then it will skyrocket AFTER that. It's math. Math don't lie.
4. Beyond my pay grade.
5. See #3. Rates will rise and all the debt will explode.
6. "And all this comes at a time when the budget sequester already imposes government spending cuts and higher taxes. So tapering means double down on economic drag at a time when the world economy is dangerously slowing down."
Not a single fucking dollar was cut from the badeline in any part of the budget in the so-called sequester. It is and was ll bullshit. In the end only $44 billion (even less by some accounting) was not pumped into the parasite economy by Uncle Sam. It means nothing in light of the $85 billion/month pumped into the market to reinflate the asset bubbles and provide easy "profits" for the financial industry. Sure we can continue that program and get an even larger crash down the road hurting even more people along the way.
The Fed won't change a thing unitl it has nothing left to do. At this point it has lost control and is shitting its pants as their Keynesian Doomsday Plan goes Helter Skelter.
Nothing good will come from any of this except perhaps when it happens this time it will be so fucking devasting that all the assholes thats seem to forget every crash in recent history effectively caused by the same behavior, might just realise the error in their ways and adjust their behavior in all aspects of life especially the one about endorsing the all powerful leviathon state that is primarily to blame for all these events.
But I doubt it.
"And all this comes at a time when the budget sequester already imposes government spending cuts and higher taxes."
No, it doesn't. The expiration of the Bush tax cuts and payroll tax holidays is a separate issue and the sequester reduces the growth of govt spending, it doesn't actually reduce spending.
This is a supply/demand situation. Lose/gain in "confidence" about the Dollar is a different matter. People like me have heavily invested in bullion because of lack of confidence and because a bullion investment is a no-debt/no counterparty thing.If I owe Yen denominated debt, then I think I sold the Yen and bought US$s, many months ago, to buy a US based basketball court and hoop, or whatever that guy did with the loan. So it seems to me, unwinding the trade is: buy Yen, and sell US$s, to pay back the Yen loan. (I did not read the article though).
The US dollar is still the cleanest shirt in the laundry hamper. Investors are liquidating positions in emerging markets and that cash is finding its way back to the USA. As long as all the freshly printed cash does not find its way into the main street economy the risk of inflation is low. Higher interest rates on treasuries are beginning to include a risk premium of higher inflation but those higher rates also have the effect of increasing the value of the dollar albeit in the short term.
They change their mind like the wind. It's killing what little credibility they have. And why I'm certain they'll be back with the monetary fire hose again shortly.
I don't know that they change their mind. It's just kabuki theatre and someone picked your wallet and pissed in your popcorn while you were watching.
Clean up on aisle 5.
It's more than a clean up, the shelves caved in on both sides and now we can't through.
Send that trust fund baby Bullard to Syria. We need men to run public finances. Bernanke and that other choirboy Krugman could use a few balls of their own too.
is this BULLard guy sentient?
O/T: I recently favourably reviewed a 911 book 'truther'(actually truth) book on Amazon. The hate mail assailing my inbox is FRIGHTENING. Apparently, despite the fact I live (since 1964 at age 3) in New Zealand, I am an unpatriotic, subversive, seditious Benedict Arnold. Sheesh, the USSA is seriously fucked up. What is with the mind set of your 'citizens'?.
"What is with the mind set of your 'citizens'?."
I ask myself that very same question on a daily basis. The overweight bulk of Walmart shopping Chinese trinket buying neanderthals actually believe that we are an exceptional people. They have been dumbed down to the point where they believe we are the greatest free nation on earth. It's really sad to see how many of them just accept the official government story on 911. Just watch and see the flags waving when TPTB hit us with the next false flag.
Are you getting 310 million emails? If not, you're dealing with a tiny subset of retards that exist within any large group of people. 9/11 Truth is bullshit that's been disproven over and over again, btw.
You are so silly. You first must have a mind before you can have a mind set. You have not been paying attention apparently.
FOMC Statement (just prior to Bernanke speak) : "The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability."
Then Bernanke says "taper" and sends the markets reeling, second time he's done that? He is accountable to no one but surely helping someone who knew what he was going to say.
He is accountable to somebody and their name rhymes with moth wild.
Well Mr. Bullard may be running for next Fed Chairman.
If he or others make more and more accommodative type statements they will be prime candidates. If the markets enter free fall the big honchos of industry and government as well as the public will be screaming "save us! You are killing us! You are destroying the world! Bring back your debt buying scheme to absorb all those electronic digits spewing from the Treasury Department before we choke on high priced monetized digits!
Bang- at the first leak of top candidates for the new chairsatan we get the 1st market test reversal on high volume. Funny how the market responds the right rumor.Now we have confirmation the market will stop the free fall when an insatiable debt buyer is being considered for the top digit buyer in chief.
Bang- the POTUS introduces his new recommendation to head the fed IS none other than the top accommodator of the bunch. The stock market displays another mega volume short covering led by HFT robots.
Now there is no choice but to have the top accommodator take his seat or risk further market desperation free fall.
Just writing the next chapter. The final one will come after the parabola becomes vertical.
These guys are going to be jumping all over each other on who will print moar as they jostle for the Bernank's job.
there's no real recovery so QE can't end, the mere hint of reducing QE sends the markets reeling, there would probably be a financial (and housing) collapse if they actually started a QE exit, the Fed has been THE financial recovery when the marginal buyer becomes the marginal seller everything changes
This is very true but if you (the big you, not you, personally) believe in the global agenda and that tiresome phrase New World Order, then you believe that a collapse is being engineered and is part of the grand plan. TPTB want to collapse the system at a moment when most of them can profit from it. I don't think they are there yet. But it's coming. It has to. That's why the question of will he or won't he, taper, is really moot. Personally, I don't believe it will be a taper; I believe it will be a sudden stop due to some "unforeseen" circumstance and we will be ushered into the next phase of their plans, on our way to a true feudal society. They can't do it gradually and risk a rebellion. They need us all caught in the dark while they rearrange the furniture before they turn the lights back on. Something like 2008 only on steroids and flavoured by a sense of doom equal to an alien invasion or some other apocalyptic event.
Here's the thing so eloquently stated by Marc Faber:
"People with assets are all doomed."
Your parents did everything they were told and saved/invested for retirement and are currently living off their hard work and frugality?
They will be crushed.
The so-called wealth is all on paper and when it crashed it will all go up in smoke save for the few who "cash out" before it's lights out and either hold loads of ever more worthless cash or have tangible hard assets that have the ability to actually produce something of value. Good luck with that.
The whole Fed board should be hung from the street posts.
People with paper currency are also doomed. The Fed thinks they can print 3 trillion dollars and quarantine it JPM and BAC. LOLOLOL! Hyperstagflation is all that is coming to America. The massive bank deposits at the Fed are just a small delaying factor. Gold is a gift at these prices. The current lack of an onset of hyperinflation makes a lot more sense when you realize that dollar for dollar, the banks stole all of the QE money and kept it.
Make up your mind dumbshit.
It seems that the fed is bad but it doesn't have to be? Is that what he's saying?
Sorta like holder saying the white house has done nothing wrong.
Could it be that the the declining economy is seen as a sign that the experiment isn't working so instead of continuing the folly expecting different results they have returned to sanity and decided to end the experiment. Or possibly they fear the instabilities they have created.
The Fed board of governors == The Blind men and the elephant!
Seems like they should have raised the $85 Billion , not mention cutting it. With real joblessness running about 16%.....
The only jobs QE has protected are the sinecures of the money center banksters.
The Fed-driven liquidity has had every institutional investor exiting commodities and bonds and piling into equities for the past 6 months. This jawboning about "tapering" now has those same investors bailing on their equity positions into cash. Maybe a Cyprus-style "bail-in" is coming soon for all that cash sitting on the sidelines?
There is plenty of money on 401Ks and IRAa looking very tempting for the banksters to grab.
Yeah, the last thing we need right now is a stock market that reflects the reality of our situation.... That's what gold is for in the new normal Bitchez, as long as gold goes down everyday nothing to worry about.
What utter nonsensical propaganda
Like Mr. Bernanke, Mr. Bullard is impervious to reality. He also does not realize that Mr. Bernanke was forced to follow the bond market lead. Mr. Bullard appears to be an economic dullard, which is probably a plus when working with the Wizard of Oz.
Targeted inflation is like a pre planned theft.
Fuck yous bankers.
There is no dissent whatsoever within the Fed. It is a tool of the elite and has no internal mandate except to serve their agenda. Any statement issued from the Fed is to manipulate the markets until they decide to pull the plug at the exact moment at which the elite can take the most from the board before declaring the game is over.
lol. Bullard wants Bens job, when he gets it we can call him Dullard.
Basically FED is painted into a corner and knows it. Keep pedal to the metal and risk bubbles popping. Jawbone about 'taper' and let some air out of the markets all the while you keep pumping money into this beast like a Doctor asking for paddles, and yelling 'charging', "CLEAR", SNAP.... Anything? Nothing Doctor.. Repeat.
The more the FED does, the less of an economy we will have and the greater chance a group of other nations finally decides to ditch the USD and create a new trading/world reserve currency etc. Probably the best thing the rest of the world could do btw is have a backup for the USD denominated markets.
As to why the dollar is going up. Covered by others, simply carry trade unwinds. Basically at this point the issues with holding non USD denominated assets or positions is getting more and more risky. Time to lock profits and move on. Hence the bump.
I thought the most interesting Ben comment was the mystification as to why rates bumped .5% over the past couple months. Rising interest rates are basically the market doing Bens job signalling inflation, as well as significant lack of confidance in the US (not a suprise). Part of this whole move may have been insiders getting the early word from Fed they actually are going to start unwinding. Unfortunately Bill Gross is not on that insider list. So one could conclude that the insiders got the word about 2-3 months ago that 'taper' yapping was coming and to start unloading bond positions. Notice around the same time gold and silver got hit (a correlated bonus to this taper talk), and this all happened in conjunction with the banking elite meeting with Obama. Which was a perfect time and place to do some POTUS approved collusion.
This stuff doesn't just happen, its preorganized and planned.
Ask the right question.
Q: IF the elite are still in control, what do they gain by causing these markets to drop.?
A; Cheaper assets to buy, exposed short positions in PMs to cover. Money to be made on margin by volitality. A further ass raping of anyone with any real assets. Added bonus is that it cools housing (if one thinks that is heating up too fast), AND it inspires anyone looking to buy a house to get moving out of fear rates will continue to rise. It also forces government to start looking at its financial house seriously because interest on debt will start climbing steadily. FED easy money is only good if in short order it allows the economy to 'refire', the FED economic gasoline being added now is actually putting the economic fire OUT and they know it.