Peter Schiff Warns Yellen's Nomination Means Any QE Taper Expectations Are "Delusional"

Tyler Durden's picture




 

Submitted by Peter Schiff via Euro Pacific Capital,

Now that Janet Yellen has been named to lead the Federal Reserve the global financial markets should factor out any possibility that the Fed will diminish their Quantitative easing program anytime during her tenure. In fact, financial forecasts should assume that not only is a taper off the table, but that the QE program is now more likely to be perpetuated and expanded.
 
Unlike her predecessors, Janet Yellen has never had a youthful dalliance with hawkish monetary ideas. Before taking charge of the Fed both Alan Greenspan, and to a lesser extent Ben Bernanke, had advocated for the benefits of a strong currency and low inflation and had warned of the dangers of overly accommodative policy and unnecessary stimulus. (Both largely abandoned these ideals once they took the reins of power, but their urge to stimulate may have been restrained by a vestigial bias against the excesses of Keynesianism). Janet Yellen, who has been on the liberal/dovish end of the monetary spectrum for her entire professional career, has no such baggage. As a result, we can expect her to never waver in her belief that stimulus is the answer to every economic question.      
 
The Federal Reserve was originally charged with the single mandate of maintaining price stability. In recent decades that mission evolved into a dual mandate of seeking price stability and full employment. I believe that a Yellen led Fed will return once again to a single mandate, but now it will focus only on employment. Based on her clear beliefs in the ability of dovish monetary policy to relive human suffering she will be inclined to dig in her heels into the ongoing QE program more than anyone else President Obama may have appointed. This is terrible news for the U.S. dollar and the U.S. economy.
 
For now at least the crisis in Washington has squelched any immediate discussion of a taper in the remaining months of 2013. Any predictions that a Yellen-led Fed will somehow show more resolve towards responsibility in 2014 or 2015 should be looked at as delusional.

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Wed, 10/09/2013 - 18:55 | 4039583 McMolotov
McMolotov's picture

Bullish for the 1%. Shittish for everyone else.

Wed, 10/09/2013 - 18:57 | 4039589 TaperProof
TaperProof's picture

Bullish for precious metals... and you don't need to be the one percent to own it.

Wed, 10/09/2013 - 19:15 | 4039635 Dear Infinity
Wed, 10/09/2013 - 19:15 | 4039642 CH1
CH1's picture

I'm not at all sure she makes her own decisions.

The Fed has OWNERS, even though we don't know who they are.

Wed, 10/09/2013 - 19:20 | 4039654 FL_Conservative
FL_Conservative's picture

The bag-woman will now assume her position.

Wed, 10/09/2013 - 19:30 | 4039682 TruthInSunshine
TruthInSunshine's picture

Imagine Yellen as the dumbest carpenter in a world full of massive economic problems wherein she'll interpret each as a disobedient nail.

Her hammer = CTRL+P

Wed, 10/09/2013 - 19:44 | 4039712 Bendromeda Strain
Bendromeda Strain's picture

At least Bernanke was allowed to retire. Everyone knows that when Old Yellen gets too frothy Pa will take her out back...

Wed, 10/09/2013 - 19:49 | 4039720 MisterMousePotato
MisterMousePotato's picture

Any expectations of QE tapering are delusional. If Peter Schiff himself were appointed Chairman of the Federal Reserve, he would not taper. And I say that with all due respect.

Why?

Because he couldn't. No one can, and no one is going to.

We all know how this ends.

Wed, 10/09/2013 - 19:58 | 4039734 DeadFred
DeadFred's picture

Perhaps with foreign bond holders getting pissy?

Wed, 10/09/2013 - 21:43 | 4040009 Supernova Born
Supernova Born's picture

She is a midget Romulan.

WmB7 and a golden Romulan helmet for Yellen of Troy. She shall launch a thousand QEs with the loosest...policy yet.

Wed, 10/09/2013 - 21:52 | 4040016 akak
akak's picture

Too bad she doesn't use a cloaking device --- THAT is a face that could sink 1000 ships!

Wed, 10/09/2013 - 22:12 | 4040091 bonderøven-farm ass
bonderøven-farm ass's picture

MOAR yellen!

Wed, 10/09/2013 - 22:16 | 4040104 TheFourthStooge-ing
TheFourthStooge-ing's picture

ROR yellen!

Thu, 10/10/2013 - 03:48 | 4040611 Boris Alatovkrap
Boris Alatovkrap's picture

New Chairsatan, er, Chairsatanwoman.

Thu, 10/10/2013 - 06:24 | 4040683 Harlequin001
Harlequin001's picture

Trust a woman to fuck it up...

Thu, 10/10/2013 - 08:01 | 4040798 kralizec
kralizec's picture

ChairSuccubus

Wed, 10/09/2013 - 22:25 | 4040118 Miffed Microbio...
Miffed Microbiologist's picture

Well, we all can't be eye candy but one can make a bit of an effort. I guess when you hold the world by the financial testicles this kind of thing takes a back seat.

Miffed;-)

Wed, 10/09/2013 - 19:59 | 4039738 Teddy Tenpole
Teddy Tenpole's picture

 

 

Peter Schiff, Bill Fleckenstein, et al are a bunch of boomer doomer douche bags...

Wed, 10/09/2013 - 21:54 | 4040042 akak
akak's picture

You have met the douchebag, and he is you.

Thu, 10/10/2013 - 00:51 | 4040469 Clowns on Acid
Clowns on Acid's picture

Keep Choomin' Teddy.

Wed, 10/09/2013 - 21:58 | 4040045 Radical Marijuana
Radical Marijuana's picture

Teddy, reality became boomer doomer!

Wed, 10/09/2013 - 22:20 | 4040105 TheFourthStooge-ing
TheFourthStooge-ing's picture

Teddy only has supervised visitation privileges with reality.

Wed, 10/09/2013 - 23:00 | 4040216 prains
prains's picture

Teddy's tentpole is firmly planted.......

 

he's now a sundial and it's 4:20 all day everyday

Wed, 10/09/2013 - 19:26 | 4039674 perelmanfan
perelmanfan's picture

Congrats to CH1, with the only perceptive comment in this thread. Yellen will do precisely what she's told to do. It may be that the plan is to install a "dove," and maximize the number of bagholders who will BTFATH, allowing the big boys to exit at the top. Then she'll follow orders to crash it with a severe taper, and the big boys swoop in and buy assets at cents on the dollar. You need to keep in mind that the wealthy don't want hyperinflation - they have more to lose than others do. The move I describe here means the 1 percent win both ways - acquiring maximum stores of wealth and maintaining the value of their dollars at the same time.  

Wed, 10/09/2013 - 20:14 | 4039774 LetThemEatRand
LetThemEatRand's picture

I would add that a serious and sustained correction in the stock market would also destroy many pension funds, further flooding the country with desperate people willing to work for almost anything and essentially turning the working poor f/k/a the middle class into the destitute.  The End Game is a neo-feudal society.  The pieces are in place, the question is timing.

Wed, 10/09/2013 - 22:31 | 4040138 Pandorable
Pandorable's picture

OF COURSE that's the plan. Yellen is endorsed by the cabal to demolish the middle class...leaving the elites to rule the slaves.

If you watch closely, you may glimpse her shape-shifting.

Wed, 10/09/2013 - 19:46 | 4039711 dick cheneys ghost
dick cheneys ghost's picture

CH1 you stupid ape.....here is what francis_sawyer taught us about ownership of the FED....

''NO... It's NOT... IT knows EXACTLY what it's doing... The FED [is NOT ~ surprisingly ~ a limestone building ~ It's European Jewish banking Families]... It's the same thing that jewish bankers have done for the past 300+ years... When the going gets tough... The jews get PRINTING...''

Wed, 10/09/2013 - 20:34 | 4039819 vulcanraven
vulcanraven's picture

RIP f_s

Wed, 10/09/2013 - 20:58 | 4039888 smlbizman
smlbizman's picture

francis is still here, just like an illegal he used another ss #.....what kind of fight club do we have if he "had" to abdicate ......he can express any view he wants, u dont have to agree and if ur afraid of his typing, than u are a cunt and need to proceed directly to marketwatch......say it aint so francis..say it aint so...

Thu, 10/10/2013 - 13:41 | 4042108 TimTom
TimTom's picture

Most hawks on the Fed are Jews and I'm pretty sure Peter Schiff is as well. Your viewpoint is akin to saying "most of the Democrats in the Senate are white, therefore whites are socialists."

Wed, 10/09/2013 - 20:38 | 4039831 joego1
joego1's picture

It seems obvious that the owners of the Fed (and everything else) are the big commercial bank major share holders/officers. Like Jamie and Loyd and their friends. They simply visit Pres. 0 and instruct him to hire bag holder lady to provide a plan for maximizing profits on bubble exit. Get ready to eat shit Amerika.

Wed, 10/09/2013 - 19:19 | 4039657 DaddyO
DaddyO's picture

I'm sorry, but I burst out laughing when I read the headline. The Tylers have been really on top of their game recently.

Schiff states the obvious, why is anyone surprised. I did however like his premise that Greenspan and Benanke were hawkish and only changed their spots after taking the reins of power, BullSh*t!

DaddyO

Wed, 10/09/2013 - 20:05 | 4039761 StormShadow
StormShadow's picture

Correct w regard to BB, however Greenspan was a hard currency gold bug back in the day before he made the change from Annakin to Vader.

Wed, 10/09/2013 - 21:08 | 4039920 TaperProof
TaperProof's picture

Yes he was, Greenspan was a gold bug, don't know about BB

Wed, 10/09/2013 - 19:31 | 4039684 AllWorkedUp
AllWorkedUp's picture

"Bullish for precious metals"

That's what I keep thinking and hearing and yet they still suck almost every day.

Wed, 10/09/2013 - 21:41 | 4039919 akak
akak's picture

"What do you mean, 'the Titanic is sinking' "?  Poppycock!  It's 2:00 AM, and we are still above water!  Begone with your fearmongering and conspiracy theories!"

Wed, 10/09/2013 - 21:38 | 4040000 yepyep
yepyep's picture

its pretty obvious the pm markets are not honest markets with prices derived from supply and demand.

inflation is good for gold, just because a manipulated gold price does not reflect this does not mean its not true.

by the time golds real values are realised it probably wont even be able to be priced in dollar's anyway.

Wed, 10/09/2013 - 19:48 | 4039723 QQQBall
QQQBall's picture

Gold down 13 bucks on Ol' Yellen... Gold going lower still

Wed, 10/09/2013 - 22:12 | 4040088 DaddyO
DaddyO's picture

Silver got the message a little early, say about 0300 the day before...

DaddyO

Wed, 10/09/2013 - 20:13 | 4039769 Againstthelie
Againstthelie's picture

QE3 and QE4ever had no positive impacts.

The inflation expectations because of QE did not come true. The money QE creates is not going into the economy, but the financial institutions sell their bonds and receive the freshly printed money and they play with this money in the parts of the financial markets, which perform best: stocks.

With Yellen the frontrunning of the FED could begin and also bonds could begin to outperform again which would bring the interest rates down again. Which would be good for gold, but not directly, only indirectly with lover lower real rates. But also for dividend paying stocks.

Without a self sustaining economy which is creating inflation with credit expansion, massive government spending for the low income households would boost gold.

Wed, 10/09/2013 - 21:11 | 4039925 TaperProof
TaperProof's picture

No they released fed minutes and said TAPER IS ON, then Yellen came out and said "the fed needs to watch out for inflation".     All bullshit of course but never underestimate the number of total fucking idiots managing money.

Thu, 10/10/2013 - 00:39 | 4040451 lasvegaspersona
lasvegaspersona's picture

if by 'precious metals' you mean physical gold...I agree..

Wed, 10/09/2013 - 18:55 | 4039592 johnQpublic
johnQpublic's picture

she wants any more stimulous it needs to come from a dildo, because we are fucking broke.

Wed, 10/09/2013 - 20:37 | 4039834 azzhatter
azzhatter's picture

At least she's hot

Wed, 10/09/2013 - 18:55 | 4039584 nmewn
nmewn's picture

Zimbabwenomics or bust!

Wed, 10/09/2013 - 19:03 | 4039605 SHEEPFUKKER
SHEEPFUKKER's picture

Mugabewannabe

Wed, 10/09/2013 - 19:23 | 4039665 Bendromeda Strain
Bendromeda Strain's picture

With a bad case of Gono...

Wed, 10/09/2013 - 18:56 | 4039587 Cognitive Dissonance
Cognitive Dissonance's picture

Plenty of Kool-Aid left in the bucket and ink in the printer.

<Full speed ahead and damn the consequences.>

Wed, 10/09/2013 - 18:56 | 4039588 SWRichmond
SWRichmond's picture

All of DC is delusional so she'll fit right in.

Wed, 10/09/2013 - 18:59 | 4039597 RaceToTheBottom
RaceToTheBottom's picture

Watch for Yellen haircuts to be the rage at stylish haircuting establishments across DC

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