If You Don’t Trust the Fed, Here’s An Inside View That Confirms Your Worst Suspicions

Tyler Durden's picture

Submitted by F.F.Wiley of Cyniconomics blog,

Earlier this year the notion that the Fed might modestly taper its purchases drove significant upheaval across financial markets. This episode should engender humility on all sides. It should also correct the misimpression that QE is anything other than an untested, incomplete experiment.

- Former FOMC Governor Kevin Warsh, writing in the Wall Street Journal on November 13.

If I may paraphrase a sainted figure for many of my colleagues, John Maynard Keynes: If the members of the FOMC could manage to get themselves to once again be thought of as humble, competent people on the level of dentists, that would be splendid. I would argue that the time to reassume a more humble central banker persona is upon us.

- Dallas Fed President Richard Fisher, speaking in Chicago on December 9.

I fault the Fed for its lack of intellectual leadership on the economy and, in particular, Bernanke’s lack of forthrightness about the limits of the Fed’s ability to address slow growth and fiscal disequilibrium.

- Former St. Louis Fed President William Poole, speaking in Washington D.C. on March 7.

Does anyone else see a common theme?

Last month, we offered a plain language translation of the Warsh op-ed, because we thought it was too carefully worded and left readers wondering what he really wanted to say. Translation wasn’t necessary for Fisher’s speech, which contained a clear no-confidence vote in the Fed’s QE program. Poole’s comment was from a seminar question-and-answer session earlier this year, but it reached our inbox only last week in a transcript published in the latest Financial Analysts Journal. The Q&A was attached to an article that I’ll discuss here, because it makes claims we haven’t heard from others with FOMC experience.

Here’s an example:

Ben Bernanke talks a lot about risk management and the tradeoff between benefits and costs; he maintains that the need to balance these two issues justifies proceeding with the current policy. But Bernanke does not discuss the risk of political intervention in Fed policy despite numerous examples of the Fed giving in to political pressure and waiting too long to change its policy, which results in a detrimental outcome for the economy.



Essentially, pressure on the Fed will come from inside the government and may not be very visible; it may be limited to a few op-ed articles from the housing lobby. [FFW – presumably, Poole intended “it” to refer to the visible part of the pressure.] The true amount of political pressure will be largely hidden.

Poole is more or less saying that we have no idea what’s truly behind the Fed’s decisions. But he doesn’t stop there. He’s willing to make a prediction that you wouldn’t expect from an establishment economist:

[T]he real issue is the politics of monetary policy … I believe that the Fed will not successfully resist the political winds that buffet it. I am not a political expert or a political analyst by trade. My qualification for speaking on this topic is that I have followed the interactions between monetary policy and politics for a very long time. As with all things political, the politics of the Fed means that realities often fail to match outward appearances … I believe the Fed is likely to overdo its current QE policy of purchasing $45 billion of Treasuries and $40 billion of MBSs per month.

So there you have it: a 10-year FOMC veteran wants us to know that central banking isn’t all about the latest hot research on the wonders of unconventional measures.  On the contrary, monetary policy is no different than other types of policymaking; it’s guided by hidden political forces.

If you don’t mind our saying so, we feel a bit vindicated. Our very first Fed post ten months ago included the following:

As for the flip-flop [the Fed’s commitment to lifting the stock market through QE so shortly after claiming no responsibility for stock prices in recent bubbles], it’s easy to find a logical explanation. The banks want QE. Influential political and economic leaders want QE. Therefore, the path of least resistance is to give them QE. On the other hand, market manipulation to prick the Internet and housing bubbles would have been widely unpopular. Therefore, policymakers rejected the idea that they should manipulate markets and prick bubbles. No one likes to be unpopular.


More generally, QE seems to me to be explained by Bernanke (and his colleagues) being unable to sit still. This is natural behavior when you have to continually justify decisions. It’s not easy to explain to Congress, the media or public why you’re doing nothing but waiting for past policies to work. It won’t be long before people portray you as weak and indecisive and tell you to “Get to work, Mr. Chairman.” But once you start implementing new policies, especially if they’re in a direction that’s expedient for everyone in the short-term, then those criticisms go away. They’re replaced by adjectives like bold and proactive. And who doesn’t want to be known as bold and proactive?

We haven’t returned to this theme often, partly because it can’t be tested like we can test the Fed’s economic beliefs. Regular readers know that we do quite a lot of empirical work. We try our best to follow David Hume’s maxim that: “A wise man, therefore, proportions his belief to the evidence.”

As we see it, the Fed’s economic beliefs are proportioned more closely to political factors than real-life evidence. You might replace Hume with Upton Sinclair, who said “it is difficult to get a man to understand something when his salary depends on him not understanding it.”

In other words, politics and personal incentives are a huge part of the picture, and not just in central banking but in the economics profession more generally.

The theories underpinning current policies, which have built up over the last 80 years or so, can’t be properly understood without thinking through the motivations behind key developments. Some of the motivational factors are obvious, while others are more subtle, but I won’t clutter this post with our musings on the hidden drivers in economics. Detlev Schlichter offered a nice summary in his book, Paper Money Collapse:

It would be naïve to simply assume that the exalted position of [mainstream economic] theories in present debate is the result of their superiority in the realm of pure sciences. This is not meant as a conspiracy theory in the sense that professional economists are being hired specifically to develop useful theories for the privileged money producers in order to portray their money printing as universally beneficial. But it would be equally wrong to assume that the battle for ideas is fought only by dispassionate and objective truth-seekers in ivory towers and that only the best theories are handed down to the decision makers in the real world, and that therefore whatever forms the basis of current mainstream discussion must be the best and most accurate theory available. No science operates in a vacuum. The social sciences in particular are often influenced in terms of their focus and method of inquiry by larger cultural and intellectual trends in society. This is probably more readily accepted in the other major social science, history. What questions research asks of the historical record, what areas of inquiry are deemed most pressing and how historians go about historical analysis is often shaped by factors that lie outside the field of science proper and that reflect broader social and political forces.


Moreover, ever since mankind began writing its histories they have served political ends. History frequently provides a narrative for the polity that gives it a sense of identity or purpose, whether this is justified or not, and the dominant interpretations of history can be powerful influences on present politics. Similarly, certain economic theories have become to dominate debate on economic issues because they fit the zeitgeist and specific political ideologies. This is not to say that economics cannot be a pure, objective science. It certainly can and should be. Whether theories are correct or not must be decided by scientific inquiry and debate, and not in the arena of politics and public opinion. But it is certainly true that many economists do depend for their livelihoods on politics and public opinion, and that they cannot operate independently of them.

Schlichter is one of many authors and bloggers willing to discuss the awkward realities lurking behind economic theory and central banking. But these ideas are considered taboo by most mainstream media outlets. They’re not discussed in establishment venues or spoken by establishment figures.

Or so I thought.

Poole’s refreshingly honest take on the Fed’s inner workings – from someone who truly knows what goes on behind the curtains – is more than welcome.

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vmromk's picture

Trust the Fed ? Would you not trust Charles Ponzi ?

DEATH to the CRIMINAL Federal Reserve.

LetThemEatRand's picture

If we can't audit the Fed, can we at least rename it The Madoff?  At least a few people may start to get the idea.

knukles's picture

Yeah yeah yeah yeah yeah
things gonna be all right soon.
Just temporary setbacks, transitory.
Unusual events.

Like the Federal Government closing down for a day last week due to the no snow storm.
Otherwise they'd a made or saved 2,288,493.27 jobs.
Don't wanna pull job creation too far into the present, so we'll just add those folks into the monthly numbers over the next 18 months.

Nothing to see here, because it's all imaginary.
Bread, circuses and bullshit

So that leaves a secretive fed to print a lotta money, no?


Don't forget, as Soupy Sales would have said; "It's all fucked up, kiddies!"

markmotive's picture

Fortunately (?) the only thing you need to monitor to see what's going up or down is the Fed's actions. Like it or not, they are the game changer.

Christine Hughes on following the Fed:


SoilMyselfRotten's picture

Gadzooks, Steve Liesman will have something to say about this!

Imminent Crucible's picture

Now you know why Poole stepped down, before the dam burst:

" In 2003 then President of the St. Louis Federal Reserve, William Poole publicly called for the US Government to cut its implied guarantee of Freddie Mac and Fannie Mae claiming then that the two lacked capital to weather severe financial crisis.  Poole, whose warnings were dismissed by then Fed Chairman Greenspan, called repeatedly in 2006 and again in 2007 for Congress to repeal their charters and avoid the predictable taxpayer cost of a huge bailout."


I'd like to hear what Bill Poole has to say in private about Greenspan and Bernanke.  Volcker said it in public: "The Bernanke Fed isn't up to the job."

overmedicatedundersexed's picture

so many post rational thought, namely numbers don't lie, data does not lie, but pointing to the number of a certain very small group have positions of power in MSM, Gov, BANKS, education and so on and so forth, is a lie.

halfawake's picture

seriously, it's like they haven't read the creature from jekyll. BAILOUTS ARE THE GAME. nm, they're just controlled op.

AGuy's picture

"Trust the Fed ? Would you not trust Charles Ponzi ?"

Maybe I am sticking my neck out here, but I do trust the Fed. I do trust that they will bring misery and suffering to 99% of the global population.


TheReplacement's picture

That's because you get it.  Now go spread the enlightenment.

BullyBearish's picture

Do you think Janet Yellen will be as good an administrative assitant to Stanley Fischer as she was to the Bernank?

johngaltfla's picture

I don't know Bully, but they won't have to worry about flies at the Fed. That face will keep all kinds of critters away, especiallyi capitalists.

The Gooch's picture

And Francis Sawyer.

His name was Francis Sawyer.

Antifederalist's picture

Perfect set up. She is the face. He is the brain. Evil brain at that.

frankTHE COIN's picture

Of course she will. Yellen made 1st Team All Fluffer in school.

johngaltfla's picture

Isn't trusting the Fed like buying a steak knife set as a Christmas present for Charles Manson?

kralizec's picture


But as we all know, not everyone is sensible and has their head outside of their rectum.

NoDebt's picture

This is a revelation?

The Fed worships at the altar of big banks and the government- it's primary stake-holders (and I have increasing difficulty distinguishing between the two).  The only thing that will stop their multi-decade policy of "if it moves, print at it" is when their policies stop benefitting BOTH of their stake-holders simultaneously, as they do now.  What would tigger such a rift?  Not sure, but I suspect rising interest rates would be part of the trigger.

Until that happens, they will continue current policies to a greater or lesser extent (tending more towards the 'greater' end of the spectrum).

Robot Traders Mom's picture

Completely agreed.


"...monetary policy is no different than other types of policymaking; it’s guided by hidden political forces."


This is definitely from the #NoShit file...

Billy Shears's picture

"First, kill all the lawyers!"

William Shakespeare

Pseudo Anonym's picture

cannot have that.  that would take care of a large portion of the jew population.  another holocoust?

knukles's picture

Two elderly Jewish gents are walking alomg the street and pass a cathedral with a sign out front says: "Conversions, $200"
One looks at the other, shrugs his shoulders and says: "Meh, why not give it a try"
10 minutes later he comes out and his buddy asks him if it worked. 
He says:  Meh, I don't feel any different."
His bud asks: "Didju get the $200?"
He looks at him and says: "My God, don'tchu Jews ever think of anything but money?"

dow2000's picture

Q: How was copper wire invented?

A: By two Jews fighting over a penny.

eddiebe's picture

Hey, when you own the printing press, you make policy; you don't have to ask some slimy ass kissing politician for anything. Geez!

Atomizer's picture

The ANC Destroyer

Selfie: David Cameron and Barack Obama took a picture of themselves alongside Denmark's prime minister Helle Thorning-Schmidt


A Nigger’s fool can become, the fools Nigger.

Read that over until you grasp the meaning. This is what is transforming before your eyes.

Atomizer's picture

Thank you for down votes Mao Zedong ZH blog soldiers . You cannot swing the UN bullshit as racism. Looks like you just got caught up in your own propaganda sting. Let’s see how you can dig yourself out of this hole. Tag, your it.

michael_engineer's picture

"Poole is more or less saying that we have no idea what’s truly behind the Fed’s decisions. But he doesn’t stop there. "

My best guess what's truly behind their decisions involves the affects of resource constraints.


This more recent analysis (a long, detailed, professional .pdf worthy of reading) along those lines is from more well known Tullett Prebon:


Tullett Prebon is an inter-dealer money broker.  Per Wiki...The company operates as an intermediary in wholesale financial markets. Many of its clients are commercial and investment banks. It operates in eight product areas: Volatility, Rates, Credit, Treasury, Non Banking, Energy, Equities and Property.

So, if their clients are commercial and investment banks, then it is a very interesting message that Tullet Prebon is telling to them with this material.  I wonder if the parts of the Fed could be considered commercial or investment banks? ...Hmm. 

Even Deutsche Bank is thinking along the lines that there has been some important structural change per the recent ZH article "We Think Something Structurally Changed Since The Great Financial Crisis"

janus's picture

i agree with you, but...

"...resource constraints."  i think resourse 'constraints' is flatly understated

according to whom?  who calculated these estimates, and specifically those of the saudi reserves...my guess (and i have reason to hazard this guess) is that it's a fraction (with a diminutive numerator atop a troubling denominator) of what's claimed...we're playing a game based on assumptions promoted by powers unseen...like those who pay for the calculation of such estimates.

oil being underground makes this easier than, say, overestating your wheat crop.

give me a gold backed dollar and a series of middle eastern colonies or give me anarchy!  (updated from p. henry)  people of earth, it really is that simple.  you cannot have your idealistic notions of self-determination AND governments as they exist.  so, either abandon your soverignty or start picking which nations you'd like to colonize.  i claim iran and kazakstan to begin with...your turn, russia.  russia takes saudi and mexico...your turn china.  china takes east africa and taiwan (for sentimental reasons).  the EU claims lybia and the sudan.  on and on and on.

one thing's FOR SURE...it'll be a golden literary age full of high adventure either way...colonies or anarchy -- win/win for the writer.


i'm working on a rewrite, that's right/

gonna change the ending/

throw away the title/

toss it in the trash,



Cognitive Dissonance's picture

"Schlichter is one of many authors and bloggers willing to discuss thee awkward realities lurking behind economic theory and central banking. But these ideas are considered taboo by most mainstream media outlets. They’re not discussed in establishment venues or spoken by establishment

One may endlessly debate and complain about the effects and consequences of the system, but one must never question the system itself.

Ignatius's picture

Debt free money is the civili rights issue of the 21st century.

Atomizer's picture

One may endlessly debate and complain about the effects and consequences of the system, but one must never question the system itself.

Many have begun questioning the state of affairs. Fear breathes down their necks. Consequences equates to tearing down the small family controlled ponzi scam they call capitalism. Monopoly is the precise term. We’ll rip down the monopoly to jump start capitalism... Again, we know where they live. :>)

Rafferty's picture

Precisely the same as in the old USSR.

RaceToTheBottom's picture

It would be interesting to know whether Fisher took any credit for the education/miseducation of his student, The Bernank

hangemhigh77's picture

Hang all these fukers.  Enough talk talk TALK!!!  I've heard enough, START HANGING THEM!!  

Seasmoke's picture

Free Francis Sawyer.

janus's picture

& bank guy in brussels, et al.

these aren't the principals espoused in the manifesto i read, lo those two-plus turbulent years ago.  in point of fact, this kind of behavior is antithetical to the philosophical spirit animating said manifesto.

is this 'ladies home journal' or is it mutha-fuckin Fight Club?  but the Tylers (you boys just barely keep caps) are making new friends (and have been for over a year), very powerful, charming, erudite and well-meaning friends.  friends who, when they invite any of the Tylers (maybe one in particular...hmmm?) to any social function, first flatter, 'oh, my dear, it's simply fabulous what you've done...and i read...oh, tis no secret, we all read...it's only, well, we find some of the comments concerning; off-putting, really.  it's altoghether ghastly.'  then they nudge (for Tylers' own good (and by extension the good of all we ZHealots)) thusly, 'but in order to spread-out in natural directions -- that is, to flourish --you're going to have to prune some of the blight from your branches'...or something to that effect.  

something tells me janus isn't too far off.

it's tough to say no; few find the courage; fewer still are heroes...the wine is, after all, top-shelf -- and the pussy parading about in such settings?  well, they are parabolic-spike-making in the mostest. 

maybe we've expected too much; maybe the fault is not in our Tylers, but in our selves, dear ZHealots.

perhaps some of us have been named by these swanky 'friends'; perhaps some of us have made the list:


tribute to F Sawyer:



the simple and salient question is therefore: are we -- having so prospered from the wisdom of ages before -- to now accord 'protection' to select, abstract 'groups' over and against those God-endowed rights ennumerated unto The Individual in silly things like the Magna Carta, The Decleration of Independence, The Constitution or the ZH Manifesto?  I say no.

I say tolerance is a sublime & truly liberal virtue; advocacy of a nebulous group is not, however, true to any authentic liberal ethos, it is instead anathema to the same...it is a new-fangled form of tyrrany (actually a very olde tyranny (not unlike the special protections extended to, oh, i dunno, 'the aristocracy'), but i digress), it is a soft and subtle tyrrany meant to cripple and cage the critical mind.

may the Lord of Hosts damn the man who would fetter a free mind!

tribute to all the ZHealots banned for words...really, words?


thank you, Johnny Cash...can't thank you enough.

and if'n yer curious, yup, janus has spent a night or two in the starkville city jail...once for flowers, too!  only, the kind of flowers they sell by the lid; or, for all you millenials, the OZ.  but things weren't so bad back then; at least you could smoke in lock-down...well, it wasn't a good idea to smoke the flowers...but many of the bruthahs were equal to the challenge -- bruthahs can hide buddage in the most uncanny places.  and to answer any questions: no, i passed on that one (don't want to say from whence he pulled that dubbage...disgusting!)

i cannot speak for the tylers or anyone else...but i will allow ole Bill Shakespeare to speak for janus:

...i am as the Northern Star, of whose true-fixed and constant quality, there is no fellow in the firmament.

thanks, Bill Shakespeare...can't thank you enough.

The Individual,



trader1's picture

The point is that "the spectacle is so fascinating." For the world is a

spell (in Latin, fascinum), an enchantment (being thrilled by a chant), an

amazement (being lost in a maze), an arabesque of such stunning

rhythm and a plot so intriguing that we are drawn by its web into a state

of involvement where we forget that it is a game. We become fascinated

to the point where the cheering and the booing are transformed into

intense love and hate, or delight and terror, ecstatic orgasm or

screaming meemies. All made out of on-and-off or black-and-white,

pulsed, stuttered, diagrammed mosaiced, syncopated, shaded, jolted,

tangoed, and lilted through all possible measures and dimensions. It is

simultaneously the purest nonsense and the utmost artistry.

Listen intently to a voice singing without words. It may charm you

into crying, force you to dance, fill you with rage, or make you jump for

joy. You can't tell where the music ends and the emotions begin, for the

whole thing is a kind of music—the voice playing on your nerves as the

breath plays on a flute. All experience is just that, except that its music

has many more dimensions than sound. It vibrates in the dimensions of

sight, touch, taste, and smell, and in the intellectual dimension of

symbols and words—all evoking and playing upon each other. But at

root—and this is a negative way of saying something highly positive—it

is nothing more than the mysterious utterance of the old man of

Spithead, who opened the window and said:

Fill jomble, fill jumble,

Fill rumble-come-tumble.

Bach states it more elegantly, but with just as little external meaning:


Once you have seen this you can return to the world of practical

affairs with a new spirit. You have seen that the universe is at root a

magical illusion and a fabulous game, and that there is no separate

"you" to get something out of it, as if life were a bank to be robbed. The

only real "you" is the one that comes and goes, manifests and withdraws

itself eternally in and as every conscious being. For "you" is the

universe looking at itself from billions of points of view, points that

come and go so that the vision is forever new. What we see as death,

empty space, or nothingness is only the trough between the crests of this

endlessly waving ocean. It is all part of the illusion that there should

seem to be something to be gained in the future, and that there is an

urgent necessity to go on and on until we get it. Yet just as there is no

time but the present, and no one except the all-and-everything, there is

never anything to be gained—though the zest of the game is to pretend

that there is.

Anyone who brags about knowing this doesn't understand it, for he is

only using the theory as a trick to maintain his illusion of separateness, a

gimmick in a game of spiritual one-upmanship. Moreover, such

bragging is deeply offensive to those who do not understand, and who

honestly believe themselves to be lonely, individual spirits in a

desperate and agonizing struggle for life. For all such there must be

deep and unpatronizing compassion, even a special kind of reverence

and respect, because, after all, in them the Self is playing its most farout

and daring game—the game of having lost Itself completely and of

being in danger of some total and irremediable disaster. This is why

Hindus do not shake hands on meeting, but put their palms together and

bow in a gesture of reverence, honoring the Godhead in the stranger.

And do not suppose that this understanding will transform you all at

once into a model of virtue. I have never yet met a saint or sage who did

not have some human frailties. For so long as you manifest yourself in

human or animal form, you must eat at the expense of other life and

accept the limitations of your particular organism, which fire will still

burn and wherein danger will still secrete adrenalin. The morality that

goes with this understanding is, above all, the frank recognition of your

dependence upon enemies, underlings, out-groups, and, indeed, upon all

other forms of life whatsoever. Involved as you may be in the conflicts

and competitive games of practical life, you will never again be able to

indulge in the illusion that the "offensive other" is all in the wrong, and

could or should be wiped out. This will give you the priceless ability of

being able to contain conflicts so that they do not get out-of-hand, of

being willing to compromise and adapt, of playing, yes, but playing it

cool. This is what is called "honor among thieves," for the really

dangerous people are those who do not recognize that they are thieves—

the unfortunates who play the role of the "good guys" with such blind

zeal that they are unconscious of any indebtedness to the "bad guys"

who support their status. To paraphrase the Gospel, "Love your

competitors, and pray for those who undercut your prices." You would

be nowhere at all without them.

The political and personal morality of the West, especially in the

United States, is—for lack of this sense—utterly schizophrenic. It is a

monstrous combination of uncompromising idealism and unscrupulous

gangsterism, and thus devoid of the humor and humaneness which

enables confessed rascals to sit down together and work out reasonable

deals. No one can be moral—that is, no one can harmonize contained

conflicts—without coming to a working arrangement between the angel

in himself and the devil in himself, between his rose above and his

manure below. The two forces or tendencies are mutually

interdependent, and the game is a working game just so long as the

angel is winning, but does not win, and the devil is losing, but is never

lost. (The game doesn't work in reverse, just as the ocean doesn't work

with wave-crests down and troughs up.)

It is most important that this be understood by those concerned with

civil rights, international peace, and the restraint of nuclear weapons.

These are most undoubtedly causes to be backed with full vigor, but

never in a spirit which fails to honor the opposition, or which regards it

as entirely evil or insane. It is not without reason that the formal rules of

boxing, judo, fencing, and even dueling require that the combatants

salute each other before the engagement. In any foreseeable future there

are going to be thousands and thousands of people who detest and

abominate Negroes, communists, Russians, Chinese, Jews, Catholics,

beatniks, homosexuals, and "dope-fiends." These hatreds are not going

to be healed, but only inflamed, by insulting those who feel them, and

the abusive labels with which we plaster them—squares, fascists,

rightists, know-nothings—may well become the proud badges and

symbols around which they will rally and consolidate themselves. Nor

will it do to confront the opposition in public with polite and nonviolent

sit-ins and demonstrations, while boosting our collective ego by

insulting them in private. If we want justice for minorities and cooled

wars with our natural enemies, whether human or non-human, we must

first come to terms with the minority and the enemy in ourselves and in

our own hearts, for the rascal is there as much as anywhere in the

"external" world—-especially when you realize that the world outside

your skin is as much yourself as the world inside. For want of this

awareness, no one can be more belligerent than a pacifist on the

rampage, or more militantly nationalistic than an anti-imperialist.

You may, indeed, argue that this is asking too much. You may resort

to the old alibi that the task of "changing human nature" is too arduous

and too slow, and that what we need is immediate and massive action.

Obviously, it takes discipline to make any radical change in one's own

behavior patterns, and psychotherapy can drag on for years and years.

But this is not my suggestion. Does it really take any considerable time

or effort just to understand that you depend on enemies and outsiders to

define yourself, and that without some opposition you would be lost? To

see this is to acquire, almost instantly, the virtue of humor, and humor

and self-righteousness are mutually exclusive. Humor is the twinkle in

the eye of a just judge, who knows that he is also the felon in the dock.

How could he be sitting there in stately judgment, being addressed as

"Your Honor" or "Mi Lud," without those poor bastards being dragged

before him day after day? It does not undermine his work and his

function to recognize this. He plays the role of judge all the better for

realizing that on the next turn of the Wheel of Fortune he may be the

accused, and that if all the truth were known, he would be standing

there now.

If this is cynicism, it is at least loving cynicism—an attitude and an

atmosphere that cools off human conflicts more effectively than any

amount of physical or moral violence. For it recognizes that the real

goodness of human nature is its peculiar balance of love and selfishness,

reason and passion, spirituality and sensuality, mysticism and

materialism, in which the positive pole has always a slight edge over the

negative. (Were it otherwise, and the two were equally balanced, life

would come to a total stalemate and standstill.) Thus when the two

poles, good and bad, forget their interdependence and try to obliterate

each other, man becomes subhuman—the implacable crusader or the

cold, sadistic thug. It is not for man to be either an angel or a devil, and

the would-be angels should realize that, as their ambition succeeds, they

evoke hordes of devils to keep the balance. This was the lesson of

Prohibition, as of all other attempts to enforce purely angelic behavior,

or to pluck out evil root and branch.

It comes, then, to this: that to be "viable," livable, or merely

practical, life must be lived as a game—and the "must" here expresses a

condition, not a commandment. It must be lived in the spirit of play

rather than work, and the conflicts which it involves must be carried on

in the realization that no species, or party to a game, can survive without

its natural antagonists, its beloved enemies, its indispensable opponents.

For to "love your enemies" is to love them as enemies; it is not

necessarily a clever device for winning them over to your own side. The

lion lies down with the lamb in paradise, but not on earth—"paradise"

being the tacit, off-stage level where, behind the scenes, all conflicting

parties recognize their interdependence, and, through this recognition,

are able to keep their conflicts within bounds. This recognition is the

absolutely essential chivalry which must set the limits within all

warfare, with human and non-human enemies alike, for chivalry is the

debonair spirit of the knight who "plays with his life" in the knowledge

that even mortal combat is a game.

No one who has been hoaxed into the belief that he is nothing but his

ego, or nothing but his individual organism, can be chivalrous, let alone

a civilized, sensitive, and intelligent member of the cosmos.

But to be lived this way, the life-game has to be purged of selfcontradictory

rules. This, and not some kind of moral effort, is the way

out of the hoax of separateness. Thus when a game sets the players an

impossible and not simply difficult task, it comes quickly to the point

where it is no longer worth playing. There is no way of observing a rule

set in the form of a double-bind—that is, a two-part rule whose parts are

mutually exclusive. No one can be compelled to behave freely or forced

to act independently. Yet whole cultures and civilizations have

befuddled themselves with this kind of nonsense, and, through failing to

spot the self-contradiction, their members have been haunted all through

their lives by the sense that individual existence is a problem and a

predicament—a form of nature doomed to perpetual frustration. The

sense of ego is at root a discomfort and a bore, and nothing shows it

more clearly than such everyday phrases as: "I need to get away from

myself" or "You should find something to take you out of yourself" or

"I read to forget myself." Get lost! Hence the fanaticisms and

intoxications—religious, political, and sexual, the Nazis, the Klan,

Hell's Angels, the Circus Maximus, the dreary fascination of the TV

screen, witch-burnings, Mickey Spillane and James Bond, pachinko

parlors, alcoholic stupors, revivals, tabloid newspapers, and juvenile

gangs—all of which, as things stand, are the necessary safety-valves and

palliatives for human beings whose very existence is defined in selfcontradictory

and self-defeating terms.

Finally, the game of life as Western man has been "playing" it for the

past century needs less emphasis on practicality, results, progress, and

aggression. This is why I am discussing vision, and keeping off the

subject of justifying the vision in terms of its practical applications and

consequences. Whatever may be true for the Chinese and the Hindus, it

is timely for us to recognize that the future is an ever-retreating mirage,

and to switch our immense energy and technical skill to contemplation

instead of action. However much we may now disagree with Aristotle's

logic and his metaphors, he must still be respected for reminding us that

the goal of action is always contemplation—knowing and being rather

than seeking and becoming.

As it is, we are merely bolting our lives—gulping down undigested

experiences as fast as we can stuff them in—because awareness of our

own existence is so superficial and so narrow that nothing seems to us

more boring than simple being. If I ask you what you did, saw, heard,

smelled, touched, and tasted yesterday, I am likely to get nothing more

than the thin, sketchy outline of the few things that you noticed, and of

those only what you thought worth remembering. Is it surprising that an

existence so experienced seems so empty and bare that its hunger for an

infinite future is insatiable? But suppose you could answer, "It would

take me forever to tell you, and I am much too interested in what's

happening now." How is it possible that a being with such sensitive

jewels as the eyes, such enchanted musical instruments as the ears, and

such a fabulous arabesque of nerves as the brain can experience itself as

anything less than a god? And, when you consider that this incalculably

subtle organism is inseparable from the still more marvelous patterns of

its environment—from the minutest electrical designs to the whole

company of the galaxies—how is it conceivable that this incarnation of

all eternity can be bored with being?

-Alan Watts, The Book, 1966



janus's picture


i thought i recognized you from my earliest beginnings here on the Hedge; and then i checked your stats -- 4 years & 22 weeks...which would place you at the very origins -- back when the Hedge was but a series of saplings planted about the perimeter of maiden lane.  4 years & 22 weeks; that's what i call bona fide.

let me say a few things (this has the potential go long)

as the resident mystic round these parts, i want to first defend your decision to post such a long piece...not that that should be standard form; but certain times call for certain things -- and 5 am on a wintry, mystical night/mornin certainly qualifies.

it's difficult to discern if you were out to criticize, commend or concoct some queer combination of the two; my guess is the latter; insofar as each part could, for janus, be taken in either a laudatory or slanderous light...but it's all-good.  if anybody can take it, janus can; only, sometimes he doesn't...like when he slaps the snarksters about with extreme prejudice.

which leads me to a most important observation and critique i have for the piece you posted.  when i attack, or, let's say, when i seek to destroy, it isn't from the perspective of one thinking 'evil' must be vanquished such that a golden age of equality, fraternity & justice may from their ashes emerge; rather, i understand the duality more than i can, under the present constraints of time, express (there is, after all, a very good reason i am janus...well, there's several reasons -- again, too much to explain).  it has more to do with a matter unaddressed in the treatise you shared; namely, balance.

which is why i support a strong russia; because they act as effective check on our boundless and feckless hubris...mind you, not because russia is 'good'...well, on a relative basis, their stated (and, when it comes to russia, stated is not always acted) objectives are good (for russians) -- in terms of foreign and domestic policy -- and they act with regard to the same; relative, at least, when contrast against our own.  besides, when did containing russia get confused with capturing russia?  were we really foolish enough to think?...nah, we couldn't possibly think we could effectively balkanize mother russia into a manageable collage of splintered shards...could we?  beware blowback, bitchez!  this may be hard for neocons to believe, but russians are actually proud of such and intend to so remain.

but i, again, digress... 

the current paradigm is out of balance; the black squares of the great game have tinctured the white with their inky abominations and desolations, moreover they have sloshed past their boundaries, such that the white squares are a squalid swill of the detritus spilt from within the bounds of their opposing brother.  evil has about it a disproportionate sway; and things are going their way.  but not for long.  

balance must be restored; all things must settle at equilibrium; but things never stay in any permanent stasis...the world (and the universe) is a dynamo of flux...it is not only the human instinct to 'over-correct' imbalance, it is the very nature of all dynamos found in our world (and the universe).  what i mean to say is, the time is approaching when the forces of 'good' will subsume and snap the spine of 'evil' till its almost forgotten...and then, well, 'evil' is loosed again to attain to equilibrium, and then some.  {side note: equilibrium is NOT an arbitrary assignation} 

other than that, i absolutely LOVED what i read; and it wouldn't surprise ole janus to discover, a few chapters later, good ole mr. watts coming around to reconcile all his ideas to this theme of 'balance'...i may be wrong, or optimistic, or both; but i am certain that i'm right...and all other ancient mystics (those worth their salt) are here of a single accord on this equilibrium thing.  hell's bells, even Jesus Christ took counsel with that serpent of olde on more than one occasion; most notably when He was tempted.  but it bears noting that Christ was known to have said, 'get behind me, satan'...and He did strike the serpent on the head (in retaliation for biting Him on the heel...vengeance is so damn sweet! -- especially when you exact it seven-fold).

the overarching point is that the world is warped something awful...evil is everywhere spreading itself out like a bay tree, choking off the Light from those who know best what to do with it.  

speaking of trees, Christ & parables, it may be instructive to review one of His gems:  (paraphrased)

The Story of The Master, The Steward and The Tree:

master: i see you've got yourself a sorry and fruitless tree...what of it, noble orchard steward?

steward: well, the thing with this tree is, it used to put off the most exquisite fruit...bloomed and brought forth the choicest of ripened deliciousness.  alas, it's all but barren...still puts off magnificent foliage, though.  

master: uproot the damnable thing...i detest it.

steward: please, master, allow me to prune it; let me dig about its roots to irrigate and fertilize...it was such a magnificent tree...oh, how it used to provide for and please many...a marvelous thing it was.

master: okay, do as you wish, honorable orchard-tender.

***okay, so, the steward does as promised...time passes, and still the limbs do nothing but blot the life giving Light from those beneath it***

***master returns to inspect***

master: what ho!?!  i demand and explanation for all this mischief!

steward: please, master...just one more season.

***and so we wait***

master: (no words, just a scowl and an air of menace)

steward: gulp!

master: take this tree, uproot it, chop it into a thousand pieces, and toss it into the FIRE!  no place in my orchard for a goddam parasitic resource-sucker!  may it rot in hell!

steward: right-o...couldn't agree more, me lord!  



so, as you can see, the tree is the US government and the master is God Almighty; and we ZHealots (and many like us) are but the humble stewards...not that we don't understand our own shortcommings and felonious tendencies -- not unlike your glint-eyed judge.

methinks it's time for purging-fires and bilious indignation on behalf of 'good'...if, that is, we want to save the whole orchard; lest evil consume the whole of the garden for the sake of a single fruitless tree...selah.

the choice is not theirs; the decision is ours.  we now have the numbers and the resolve.  i have cast my lot against evil, and i'm kindling a bonfire -- of the vanities, of course (special thanks to tom wolf).


i look forward to reading the rest on those attachments.  thanks.

and so a song:



 Well you know what it's like 

i don't got to tell you 

who puts up a fight 

walking out of hell now 

when you fought piranhas 

and you fought the cold 

there's nobody with you 

and you're all alone invictus, janus

janus's picture


i forgot one other thing; and this is my ultimate criticism of hinduism, zen & nirvana & the like...it's something of a basic philosophical principal; from which we in the west derive all others.  not that i'm averse to 'intuition' and whatnot; but if we're to apply reason and logic to our experience and how our senses interact with our surroundings, and furthermore, how our consciousness collates sense, experience, judgement and awareness...well, there is no denying our essential singularity...some fool out france-ways had this to say, 'cogito ergo sum'.  i think therefore I AM (as your bio states, pardon me for making this personal).

that is the very point.  to minimize or negate the individual -- not as in 'possession' of the godhead, but rather of and in the godhead; that is to say, the individual IS the godhead -- and classify its inviolate Truth as a low hoax, is to both blaspheme the godhead itself (The Individual) and migrate this most seminal uniqueness into a melange, or rather amoebae, of homogenized 'being'...bah!

it is this very thinking that has so far relegated the hordes of the east to despotic thuggery -- stay within the herd, we are but one, striving for one's self is but sin...again, bah!  

tell me how there's some nobility in the modes and mores manifest of that imbecility...the nations and cultures so consumed with this esoteric and ethereal balderdash are all rotting corpses of vice, depravity, poverty, disease, superstition, indolence, squalor and venal decay (and if it weren't for our zany western ideas, things would be far, far worse over there...read a bit of unfiltered history).  but, i'll grant them this, they do have some compelling scripture...only, as we in the west say, ye shall know them by their fruits.  and it's a sorry and molded bushel if ever there were such.

tell me of some ascetic monk flagellating his flesh on some windswept mountain peak, and how he serves as a model for us all; and janus will show you some Kierkegaard or some Emerson or some Twain...they and many other janus-heroes had much to say on this 'illusion' of the self -- and they had other things to say about others, others not their selves.

duality not only implies distinction; it is the necessary condition of its relevant meaning.  and by extension, singularity is all the more pronounced among the multitudes...especially for us sentient sort...the single individual...the cogito-ergoers among us.  e pluribus unium, as we say.

i don't mean to be contentious; it's just that it's an important point.

behold, the kingdom of heaven is within you,


trader1's picture


so many great philosophers. so many ideas to ponder.  if you're a fan of kierkegaard, then you may be interested in buber. 


i just discovered him today while doing my research.  

trader1's picture

hi janus,

i have thought several times about what to say in a reply to you.  i'll keep this post brief ;-)

first, thank you for the kind words.  and, you're right.  i wasn't trying neither to criticize nor commend.  rather, i read what you wrote, and i was compelled to share that text i have bookmarked by alan watts.  

we are not who we are without relationships.


Rafferty's picture

Janus, the scenario you depict for Tyler and his 'new friends'.  Well when I was in the US I saw almost the exact thing in real life. amazing similarities.  At that time though I was 'unawakened' and tought it to be sound advice.  In a sense it was of course.

essence's picture

If the Fed tapers by 10 to 15 billion, are we supposed to regard that as meaningful?

Seriously, a smallish, insignificant amount is nothing. Oh yeah, the MSM and Zerohedge will milk that for all it is worth, but in the scheme of things it is nothing.

I've a question,  why are all the Fed heads jewish?
Oops, did I say something inappropriate?
Jews = less than 2 percent of U.S. population.



Yellen --jewish

Fisher --jewish and foreign national.

Just a coincidence?  Right.

Don't expect any credibility if you ignore an elephant in the room.


Tim_'s picture

United States Secretary of the Treasury

Jacob Joseph "Jack" Lew - jew

Neal Steven Wolin - jew

Stuart A. Levey - jew

Lawrence Henry "Larry" Summers - jew

Robert Edward Rubin - jew