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The Federal Reserve: Masters Of The Universe Or Trapped Incompetents?

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Suppose the Fed was actually little more than a collection of incompetents trapped in a broken system that is beyond repair.

For a variety of reasons, the Federal Reserve is viewed by many as the financial Master of the Universe. Given how the media hangs on every pronouncement and the visible power of the Fed's policies to move markets, this view is understandable.

But suppose rather than being masters of all things financial, the Fed was actually little more than a collection of incompetents trapped in a broken system that is beyond repair. Many reasons have been proposed to explain the Fed's policies,and most (including my own expressed here) focus on the Fed's need to protect the banking sector and the Status Quo, lest the whole rotten contraption collapses in a heap of worthless derivatives and various Ponzi schemes.

An alternative view is that the members of the Fed have been selected for incompetence by a system that fosters incompetence by its very nature, i.e. a centralized power center.

Longtime correspondent Harun I. recently offered this explanation of the incompetence of those atop the heap:

Regarding the competence of the Deep State and Federal Reserve:When one merges the Peter Principle and Pareto Principle one realizes that, not only are they incompetent, it is inevitable. Complexity does not equal competence. And because complexity is a form of leverage it does not require a majority of systems inoperable to fail.

Modern developed civilizations rest upon several inverted pyramids. How many people out of any random sampling know how to produce their own food, make their own clothing, build their shelter, or tap into their own water source? As complexity increases and the division in labor grows increasingly in areas that have nothing to do with core survival the civilization becomes increasingly incompetent.

Since a civilization is a hierarchal system, its leaders (the vital few) will eventually be incompetent. Inverted pyramids and inept leadership are a toxic mix. As history would indicate this situation eventually disintegrates then reorganizes... to be repeated.

Another key characteristic of such centralized systems is the way they trap participants, even those at the top. Analyst Catherine Austin Fitts has discussed this attribute, for example, in this interview: Catherine Austin Fitts on Wall Street's Corruption, the Austrian School and Who's 'Really' in Charge.

One way to think about this is to ask: let's say the voting members of the Fed knew that the best way to re-start sustainable growth was to normalize interest rates by ending the Fed's zero-interest rate policy (ZIRP) and quantitative easing.
Even if they knew these changes would ultimately profit the banking sector and the economy as a whole, could they withstand the pressure that would be exerted by everyone benefiting from the Status Quo?

I have long maintained that the Fed's vaunted independence is actually contingent, i.e. the Fed is a political entity and as a result it responds to political pressure like any other political entity. And like any hierarchy, it is prone to group-think and the urge to conform to norms.

This raises another question: even if the voting members of the Fed wanted to fix the nation's broken financial system, do they have the ability to do so?

I have posited that whatever consensus/group-think dominated the various factions that comprise the Deep State has eroded, and the cracks of profound disunity are opening between powerful factions in the Deep State.

Rather than Masters of the Universe, the Fed's governors are increasingly looking more like deer caught in the headlights of a transformation they cannot understand, much less control.

Is the Deep State Fracturing into Disunity? (March 14, 2014)

Why Is Our Government (and Deep State) So Incompetent? (March 6, 2014)

The Fed Has Failed (and Will Continue to Fail), Part 1 (March 11, 2014)

How The Fed Has Failed America, Part 2 (March 12, 2014)


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Fri, 03/21/2014 - 11:16 | 4577014 Soul Glow
Soul Glow's picture

Trapped, bitchez.

Fri, 03/21/2014 - 11:18 | 4577028 economics9698
economics9698's picture

Leveraged 74-1, adios bitches.

Fri, 03/21/2014 - 11:23 | 4577063 strannick
strannick's picture

Or evil Skelator

Fri, 03/21/2014 - 14:46 | 4577948 linniepar
linniepar's picture

Trapped incompetents. But then again, if their goal was to crash the US and world economies they are masters of the unicornverse.

Fri, 03/21/2014 - 17:26 | 4578565 StychoKiller
StychoKiller's picture

Someone's gotta say it:  "By the power of NumbSkull!!"  :>D

Sat, 03/22/2014 - 00:17 | 4579615 SafelyGraze
SafelyGraze's picture

"This raises another question: even if the voting members of the Fed wanted to fix the nation's broken financial system, do they have the ability to do so?"

yes they have the ability

however, the "wanted to" part is complicated

as the fed lends increasing amounts of FRNs to the elongated-head aliens, these beings solidify their control over the amygdala of each fed board member

hence, each member increasingly *wants* to extend more and more credit to their robe-wearing masters

it is like the famous conundrum of the dude having orgasms every five minutes, trying to convince the doctor that he wants them to stop.




Fri, 03/21/2014 - 11:23 | 4577065 Flakmeister
Flakmeister's picture

And exactly who/what forces them in Chapter 11? Or 7?

Fri, 03/21/2014 - 11:28 | 4577083 economics9698
economics9698's picture

"And exactly who/what forces them in Chapter 11? Or 7?"

When the EBT card crowd realizes a Big Mac cost $30 and the realize there is gold in them bank vaults on  33 Liberty St, New York, NY 10045.

What a bummer when they see the vaults are empty.  Then the ropes will come out. 

Fri, 03/21/2014 - 11:29 | 4577089 jcaz
jcaz's picture

The look on Yellen's face tells the world everything they need to know-

Terrified,  confused, clueless, over her head......

Fri, 03/21/2014 - 11:39 | 4577141 Buckaroo Banzai
Buckaroo Banzai's picture

seeing that He-Man action figure reminds me of this:


Fri, 03/21/2014 - 14:21 | 4577874 daveO
daveO's picture

But, following orders. To crash the markets and then flood the system once again.

Fri, 03/21/2014 - 11:38 | 4577139 Flakmeister
Flakmeister's picture

And when does the $30 Big Mac happen?

People on SNAP don't give a flying fuck about what is in the vaults at 33 Liberty St. You give them far too much credit...


Don't get me wrong, the game is going to end, but there is at least another 15-20 years to run..

I am in the process of writing an article outlining how I see it happening...

Fri, 03/21/2014 - 11:53 | 4577209 economics9698
economics9698's picture

This next crash is going to be pretty bad.  15-20 years?  No way.

Now think what happened last crash?  Trillions printed, stagnant growth, and we are 5 years 4 months into this bubble.  And when it burst?  6.6 years, 2015?  What goes up must come down.


By the end of the decade you will see a reset.  My guess is it will get real around 2015 and escalate from there.

Fri, 03/21/2014 - 12:16 | 4577311 Stoploss
Stoploss's picture

"My guess is it will get real around 2015 and escalate from there."

When the purple party realizes they are finished in November, they will really start to tear it down.

Good observation.

Fri, 03/21/2014 - 12:28 | 4577325 Flakmeister
Flakmeister's picture

Well, you are entitled to your opinion... 

The game doesn't end until the ability to convert USD into foreign oil imports ends...

And even then the USD will likely get cut only in half as the US is still a major producer of oil with the bulk of its imports coming from its immediate neighbours, Canada and Mexico...

And I can assure you that at somepoint Venezuala will get Monroe Doctrined.....

Between Canada and Venezuala, you have the two largest exploitable resources of oil known...  

Empires do not die easily....

Fri, 03/21/2014 - 12:29 | 4577378 economics9698
economics9698's picture

West Texas crude came on line in 1931.  Did not make much of a impact on the Great Depression.

Fri, 03/21/2014 - 13:06 | 4577478 Flakmeister
Flakmeister's picture

Why would a glut of oil do that? The GD had nothing to do with the availability of cheap energy.

It is interesting that the great Permian field that you refer to was a large part in why the Allies won WWII...

Fri, 03/21/2014 - 14:51 | 4577968 Panafrican Funk...
Panafrican Funktron Robot's picture

I think you are failing to properly account for the leverage riding on the US 10 year.  It doesn't take a big move in the valuation of this product to heavily stress the entire (global) fiat system. Systemic risk starts happening around the 3% yield line.  I will say that I am not convinced the end of the petrodollar is actually imminently at hand though, depends on how China responds to their financial issues.

Fri, 03/21/2014 - 15:17 | 4578117 Flakmeister
Flakmeister's picture

You are aware that over the past two years that the FED has sterilized Treasury purchases that dwarf Chinese holdings?

And do you not think that the FED would not pull off the equivalent of another trillion of QE if it was required? The Bernanke would not have any qualms, and I doubt JY would either...

Two black swans could change things, the fall of the House of Saud and/or the loss of a carrier group or something similar...

Fri, 03/21/2014 - 14:49 | 4577962 Rafferty
Rafferty's picture

" My guess is it will get real around 2015"


I've been hearing 'it's going to happen next year' for the last three years.

Fri, 03/21/2014 - 15:18 | 4578124 Flakmeister
Flakmeister's picture


Eventually the broken clock will be right though...

Fri, 03/21/2014 - 12:04 | 4577254 NotApplicable
NotApplicable's picture

A.K.A. when does the Big Mac index go vertical?

Fri, 03/21/2014 - 11:38 | 4577136 VD
VD's picture

Fed is not a political entity per se; it is a banking entity that leverages politics. said banking sector lobbies the political machine. a vital distinction.

Fri, 03/21/2014 - 14:27 | 4577884 daveO
daveO's picture

Seems to me, the other way around. DC does their bidding. Been that way for decades. 

Fri, 03/21/2014 - 11:17 | 4577021 PlusTic
PlusTic's picture

They are either totally incompetent, or they are destoryng the country on purpose...there is no other explanation

Fri, 03/21/2014 - 11:19 | 4577034 fijisailor
fijisailor's picture

totally incompetent

Fri, 03/21/2014 - 11:28 | 4577085 Lewshine
Lewshine's picture

Here's what the average one percenter would say: "Who cares if its incompetence or genius?...Show me the money!!!"


The results of  current equity pricing kind of kicks the teeth out of the question - Nobody making a ton of money gives a shit!

...Therefore, nothing changes and the answer to the question becomes a great waste of time.


Fri, 03/21/2014 - 11:29 | 4577036 economics9698
economics9698's picture

The tribe thinks with head #2 99.9% of the time.  

Another bankrupt nation or a piece of ass.  The piece of ass wins every time. 

These fucks fight wars to run up debt and could care less about the dead.

Hang the MF’s high.

Fri, 03/21/2014 - 11:31 | 4577098 optimator
optimator's picture

They're doing exactly what they did to Germany in the nineteen twenties.  The parasite only leaves the host when the host is dead. 

Fri, 03/21/2014 - 12:12 | 4577292 Offthebeach
Offthebeach's picture

Just finished Victor Klemperer's two volume 1930s-1945 diary of Germany.

German sheeple went right along with their own slaughter either at the front, camps or under bombers. Sheeple grumbled but mostly about German EBT type state support cuts. Totally acclimated population.

Ditto Solzhenitsyn comment on grumbling in the Soviet camps. Ditto China, Cuba....

Sheeple are sheeple world wide, across time and space. And the 1% ers no matter what there names know it.

Fri, 03/21/2014 - 14:53 | 4577975 Rafferty
Rafferty's picture

Sad but true. Then again it's been said that it takes only 10% of the population to be fully awakened for revolution to take place.

Fri, 03/21/2014 - 11:39 | 4577146 madcows
madcows's picture

hey, it ain't my debt.  gimme the ass.

Fri, 03/21/2014 - 11:25 | 4577075 Winston Churchill
Winston Churchill's picture

Could be both.

Fri, 03/21/2014 - 11:47 | 4577185 NotApplicable
NotApplicable's picture

That was my thought. I see them as Masters of the Trapped Incompetents Universe.

Incompetents serve a very important obscuring function protecting the true masters behind the curtain.

Fri, 03/21/2014 - 14:28 | 4577890 daveO
daveO's picture

If bankers could install the Bolsheviks, why not BHO?

Fri, 03/21/2014 - 11:17 | 4577024 khakuda
khakuda's picture

The most amusing part of the whole thing is that asset market bubbles are appearing right in front of them and they remain blind.  When they pop, they still won't know what is going on. 

Fri, 03/21/2014 - 14:33 | 4577901 daveO
daveO's picture

They simply pretend not to see it so banks can load up on the short side(stocks). Remember all the things Greenspan said about not seeing it. Yet, Yet! he warned about Irrational Exuberance years(1996) before the bubble popped. Why didn't he raise margin rates then? Because he wanted to live a little longer! 

Fri, 03/21/2014 - 11:18 | 4577029 fijisailor
fijisailor's picture

I hate to make repetative posts but this is really relevant.

Despite "tapering"  the FED expands the monetary base by $104.8 billion in February.

I knew it.  This whole tapering thing is a lie.

Fri, 03/21/2014 - 11:22 | 4577055 yogibear
yogibear's picture

Exactly. Smoke and mirrors.

They can't stop until Russia and China comes in with baseball bats beating up the US federal reserve by killing the petro dollar, which their on target to do.


Fri, 03/21/2014 - 11:38 | 4577126 madcows
madcows's picture

no different than the deficit.... "We reduced the Deficit!  Hooray!  We're Heroes!"... Umm its still a fucking deficit.

The wife went shopping.... on sale.... look at all the money I saved.

Congress.... borrowed from the FED at rediculously low rates... funded all their re-election campaigns, er... programs.... LOOK AT ALL THE MONEY WE SAVED!  WE'RE HEROES!  NO MORE FIGHT OVER RAISING THE DEBT LIMIT.  WE FUNDED THE GOVERNMENT.  YOU'LL ALL GET "PAID".

Fucking Criminals

Fri, 03/21/2014 - 11:49 | 4577190 NotApplicable
NotApplicable's picture

The lesson being, "money is fungible."

Taper the QE while letting it out via other channels... like say that new reverse repo facility.

Fri, 03/21/2014 - 11:19 | 4577030 centerline
centerline's picture

They are not stupid.  They know the game.

Fri, 03/21/2014 - 11:19 | 4577031 yogibear
yogibear's picture

Russia and China will burst the Federal Reserve's bankster's wet dreams by refusing to play their games.

Fed head banksters, Yellen, Rosengren, Evans and Dudley, looks like your going to lose. When China and Russia get going they'll swipe the financial center from NY to Asia.


Fri, 03/21/2014 - 11:44 | 4577049 Flakmeister
Flakmeister's picture

Hardly.... By the time those pipelines are built, the world economy will be a smoking wreck...

Fri, 03/21/2014 - 11:19 | 4577039 Flakmeister
Flakmeister's picture

Actually, the FED is a mixture of both...

Peak Oil implies that what is not sustainable will not continue to be.....

Fri, 03/21/2014 - 11:22 | 4577054 Spastica Rex
Spastica Rex's picture

As a Catholic, they remind me of cardinals.

Pope Yellen.

Fri, 03/21/2014 - 11:35 | 4577121 Everybodys All ...
Everybodys All American's picture

Sorry but that's a strange view of Catholics.

Fri, 03/21/2014 - 11:43 | 4577164 Spastica Rex
Spastica Rex's picture

Well, there are good popes and bad popes, but the faithful don't ever question them. Economic theories are secular stand-ins for religion.

I may be a Catholic, but I ain't a papist. They can excommunicate me for that, if they want.

Fri, 03/21/2014 - 11:46 | 4577175 Flakmeister
Flakmeister's picture

Yeah, the college of Cardinals is good comparison... 

So rooted in outdated existing dogma that there are incapable of changing fast enough to meet the new challenges...

Fri, 03/21/2014 - 11:52 | 4577202 NotApplicable
NotApplicable's picture

Change is kind of difficult when they supposedly preach "True Gospel."

Either you're an absolute bedrock, or just another piece of driftwood in a sea of relativism.

Fri, 03/21/2014 - 12:58 | 4577526 shovelhead
shovelhead's picture

You mean just like global warming fanatics?



Fri, 03/21/2014 - 23:56 | 4578158 Flakmeister
Flakmeister's picture

Are you referring to those that are denying it on the basis of ideological grounds? If so then I agree...

Because you surely cannot be referring to overwhelming concensus of climate scientists which is based on a bewildering array of diverse data and the understanding of physical processes rooted  in 19th century physics?

Fri, 03/21/2014 - 11:35 | 4577122 Cannon Fodder
Cannon Fodder's picture

While I still believe in peak oil, it's sad that the story has died off (no pun intended). Sites like The Oil Drum seem to have given up on peak oil happening in a time scale worth blogging about.

Fri, 03/21/2014 - 11:43 | 4577165 Flakmeister
Flakmeister's picture

They closed shop because those that were generating original content found their own sites and other more lucrative gigs...

TOD never took a dime from advertising....


From 1998 to 2005, an investment of $1.5 trillion increased productiong by 8.6 mmbpd, since then $3.5 trillion invested in legacy oil production resulted in decline of 1 million barrels per day...

$3.5 trillion is equivalent of the German GDP gone up in smoke...

Fri, 03/21/2014 - 11:47 | 4577183 Spastica Rex
Spastica Rex's picture

Didn't "peak oil" already happen - in conventional, pretty much as predicted?

Fri, 03/21/2014 - 11:51 | 4577199 Cannon Fodder
Cannon Fodder's picture

I think so. I guess we are on a plateau right now. Just kind of waiting for the overall production to start the ramp down....

Fri, 03/21/2014 - 12:35 | 4577410 Uncle Remus
Uncle Remus's picture


Fri, 03/21/2014 - 12:53 | 4577500 Flakmeister
Flakmeister's picture

CERA, the outfit that Yergin shills for, should be credited for the phrase "Undulating Plateau"....

Problem was their plateau was around 115 million barrel a day and didn't start until 2030...

Problem is that by 2030, the plateau will be a warm fuzzy memory to most...

Fri, 03/21/2014 - 13:03 | 4577555 Spastica Rex
Spastica Rex's picture

Fun graph.

Serious question: when they make these types of projections, do the designers just sketch in the future peaks and valleys out of aesthetic concerns?

Fri, 03/21/2014 - 13:21 | 4577641 Flakmeister
Flakmeister's picture

It might be the little known "undulate" command in Excel...

But otherwise, utilization of Artistic License is de rigor in such work....

Fri, 03/21/2014 - 11:56 | 4577213 NotApplicable
NotApplicable's picture

Well, it's physically happened. Question is, is it due to the theory of biotic oil, or can the peak someday be overcome due to abiotic oil? Also, the peak might exist merely because of the approaching Dark Ages 2.0.

So far the only accuracy of the theory is the notion that all of the cheap/easy oil has been pumped.

Fri, 03/21/2014 - 12:07 | 4577269 Flakmeister
Flakmeister's picture

Abiotic oil has SFA to do with reality...

Wrong, all the cheap easy oil has not been pumped, it still being produced at a rate of ~40-50 million barrels a day but it is in terminal decline at a rate of 4-5% p.a.....

Prices in the oil patch are all driven on the margins... And right now the cost of a new marginal barrel of production is around $80-130.... 

Fri, 03/21/2014 - 11:50 | 4577197 Cannon Fodder
Cannon Fodder's picture

Guess I just need to start visiting some of those other sites. I miss not being able to stay on top of the oil situation.

Fri, 03/21/2014 - 12:11 | 4577290 Flakmeister
Flakmeister's picture

Darwinian's new blog is pretty good for staying abreast of production numbers....

Primary focus is on the Bakken and EFS plays, after all, without them, World C+C production would be down since 2005 instead of being up a few %....

Fri, 03/21/2014 - 14:55 | 4577985 daveO
daveO's picture

Because oil price is over $100. Just wait until prices collapse again. Peak oil is all you'll hear about, as the bankers and oil companies try to prop up the price. They started all that talk back in the 90's at @ -$20 oil. Of course, if it did fall that far,they might lose control of DC and the media.

Fri, 03/21/2014 - 15:54 | 4578265 Flakmeister
Flakmeister's picture

Dave, please do understand that this is an adult conversation and proffering opinions pulled out of your ass will not be treated lightly...

Fri, 03/21/2014 - 11:22 | 4577058 Itchy and Scratchy
Itchy and Scratchy's picture

Master Baiters!

Fri, 03/21/2014 - 11:22 | 4577059 Seize Mars
Seize Mars's picture

Sorry but I'm not really interested in debating the competence of someone who is in the process of stealing my money and trying to disarm me.
They know exactly what they're doing.

Fri, 03/21/2014 - 12:03 | 4577249 Bangin7GramRocks
Bangin7GramRocks's picture

Who is trying to disarm you? All I see is record gun production and sales.

Fri, 03/21/2014 - 15:28 | 4578167 DanDaley
DanDaley's picture

The record gun production and sales are despite their efforts; make no mistake, if "they" could flip a switch and make your guns disappear they would do it in a billionth of a nanosecond.

Fri, 03/21/2014 - 15:51 | 4578254 Flakmeister
Flakmeister's picture

Take the tinfoil hat off...

You will be the better for it...

Fri, 03/21/2014 - 19:17 | 4578884 DanDaley
DanDaley's picture

No need to be snide, Flack. I talk to Democrats, liberals, socialists, progressives, and other assorted "useful idiots" on a very regular basis, and almost without exception they want gun control, i.e., gun erradication...not every single statist, just the overwhelming majority of them.

Sat, 03/22/2014 - 10:31 | 4580125 Flakmeister
Flakmeister's picture

Not surprising given that 90% of Americans want background checks...

Sun, 03/23/2014 - 22:41 | 4584157 Seize Mars
Seize Mars's picture


Who is trying to disarm you?

Well I'm not much of a conspiracy theorist. But the data seems pretty clear:

Fri, 03/21/2014 - 11:23 | 4577062 khakuda
khakuda's picture

Hey Janet, is that a bubble in your pants or are you just happy to see me?

Fri, 03/21/2014 - 11:24 | 4577070 yogibear
yogibear's picture

LOL, the Russians and Chinese will now attack the US petrodollar.

The only way to defeat the US is economically. It's coming. So the Fed decides to go Zimbabwe.

Fri, 03/21/2014 - 11:24 | 4577072 LawsofPhysics
LawsofPhysics's picture

Incompetent?  Hardly, look at how these people and their friends live.

Destined for the guillotine?  Well, that's another matter...

Fri, 03/21/2014 - 11:26 | 4577077 q99x2
q99x2's picture

The Federal Reserve are a criminal organization that threatens the future survival of all people.

Stop looking at it in other ways.

Fri, 03/21/2014 - 11:26 | 4577078 aqualech
aqualech's picture

How can the article not consider the obvious: they are corrupt, devious, disingenuous and self-serving.

Fri, 03/21/2014 - 11:33 | 4577110 madcows
madcows's picture

... and also not entirely in control.

it's like they're riding on a bull.  maybe they can steer it for a while, or control it.  but after a while, the bull gets pissed off.

They've leveraged this bitch to the max and made a trillion-load of cash off of the interest.  But the greedy bastards aren't too bright.  They let the government get so in debt that they'll eventually default...

Sorry, Yellen, this cash cow has about dried up.  You'll be losing soon enough... the body has had all it's blood sucked out, squidlike.

Fri, 03/21/2014 - 11:31 | 4577100 Guns N Metals
Guns N Metals's picture

And everyone knows its the ashkenazi Jews who own the Fed. The Rothschilds and Goldman Sachs are the little man behind the curtain pulling all the levers. And all the dual citizen Israelies in our government carry out the orders.


By the way, I had that He-Man action figure. Till I melted it with a can of WD-40 and a Bic lighter.

Fri, 03/21/2014 - 11:31 | 4577101 elwind45
elwind45's picture

Lock up your assets

Fri, 03/21/2014 - 11:33 | 4577105 americanspirit
americanspirit's picture

Excellent analysis - I have always been amazed how so many people impute intelligence and competence to others who have or who control large amounts money when in reality they are, for the most part, simply either lucky (by birth, marriage or other circumstances) or criminal (and able to gain advantage through complete lack of ethics or morality) parasites whose wealth or control of wealth is basically an accident. No intelligence or competence involved.

Of course once they have wealth they can command the services of intelligent and competent people, but because they themselves lack both qualities they rarely know how to use the services of intelligent and competent subordinates (servants/slaves) to beneficial effect. The Fed governors are a wonderful example of this phenomenon, although there are a few exceptions among them like Richard Fisher. For the most part they are a combination of the gang who couldn't shoot straight and the three stooges. Given WAY too much credit for both intelligence and competence. The same can be said of most if not all of the famous wealthy in America - the Wall Street divas, the CNBC top 100, the 'lifestyles of the rich and famous' crowd. For the most part these people on whom the gods have inexplicably showered wealth are rather stupid - witness how unimaginatively they live their lives and employ their wealth.

Fri, 03/21/2014 - 12:00 | 4577237 NotApplicable
NotApplicable's picture

The Gods must be crazy?

I've noticed a vast improvement in CHS articles now that he's stopped suggesting political "solutions." It's amazing the clarity one can gain by simply letting go of the idea that organized crime can provide efficient goods and services.

Fri, 03/21/2014 - 12:17 | 4577318 NOTaREALmerican
NOTaREALmerican's picture

Re:  No intelligence or competence involved.

Yes and no...   Intelligence is way overrated.   Being smart-n-savvy is much more important.

The world is made up of sociopath and dumbasses.  The sociopaths use bullshit to maniupulate the dumbasses.   Using bullshit IS a skill that people are born with (like being a gifted left handed pitcher) or learned (usually) by being born into a family of sociopaths or attending a sociopath training acadamy (like Harvard). 

Fri, 03/21/2014 - 15:00 | 4578016 daveO
daveO's picture

Greenspan went Sociopath. Bernanke and Yellen are over educated morons who are being 'handled', like BHO.

Fri, 03/21/2014 - 11:33 | 4577111 TrustWho
TrustWho's picture

And the intellectual elite say they are atheist. The faith people demonstrate by their behavior blows me away. The Amish, for example, have a much more reasonable faith.

Fri, 03/21/2014 - 11:33 | 4577112 Reaper
Reaper's picture

The common fool wants to believe the heresy that the most capable get chosen. A corollary to Lord Acton's, "There is no worse heresy than that the office sanctifies the holder of it." Trust is not a virtue.

Fri, 03/21/2014 - 11:35 | 4577114 Dr. Engali
Dr. Engali's picture

I don't believe for a moment that they are incompetent. Their job is to protect the banking sector and to funnel wealth from the serfs to the elites, both of which they are  exceedingly good at doing. The 'look' of incompetence is just that, an image to make it look like the problems are not their fault, that they are too stupid to see what is going on. When in reality they know exactly what their policies are doing.

Fri, 03/21/2014 - 11:34 | 4577115 sunny
sunny's picture

Do a 1 year monthly chart of the Dow, Nasdaq, Russell 2k, SP500.  The Fed and HFT are in total control. 

Fri, 03/21/2014 - 11:34 | 4577117 youngman
youngman's picture

Its called group think....they all think they know what they are doing...because they tell each other they do...but in fact...they do not...but that is an academic....

Fri, 03/21/2014 - 11:36 | 4577128 Rising Sun
Rising Sun's picture

all central banks are designed to line the pockets of their friends and fuck mainstreet in the process


all in the name of making the economy run smoothly


and the politicians are the guard dogs that keep the pigs in the main house while we animals get the field and the barn to enjoy


thanks Mr Orwell

Fri, 03/21/2014 - 11:37 | 4577134 Theta_Burn
Theta_Burn's picture

Maybe another index, based on incompetence and call it DIX, exclusively used to hedge the VIX

They lost control yrs ago, all this "complexity" was created to keep everything expanding.

The expansion is over, and trapped we all are...

Fri, 03/21/2014 - 11:39 | 4577140 pound the vix
pound the vix's picture

When you can give $4 Trillion+ to your friends you are the master of the universe.  Not going into finance was worst career move anyone could have made inhe last 10 years.

Fri, 03/21/2014 - 11:40 | 4577153 Kyloe114
Kyloe114's picture

Instead of treating and seeing .Gov as big brother, its a worth while expenditure of energy to see and treat them like little brother. Just ignore them then place the focus on your only out, reclaiming compitance within your individual lives. Collect your own water, grow your food, make your own clothing. Tell your own jokes and for shits sake play your own music. Do it before you have to do it and totally suck at it.

Fri, 03/21/2014 - 11:49 | 4577189 asscannon101
asscannon101's picture

I love that Janet Yellen doll that you chose for the story pic, too. 'She-Man and The Bastards of the Universe!!'

Fri, 03/21/2014 - 11:56 | 4577219 Fix It Again Timmy
Fix It Again Timmy's picture

ZIRP - It's what you do when you don't know WHAT to do!....

Fri, 03/21/2014 - 13:03 | 4577553 JR
JR's picture

Let’s all wake up: Our enemies do know what to do.

Communist takeovers, for example, are made by people who know what they are doing in the USA. Inflation is one of the weapons the US used to establish Mao’s communist power over China:

The inflation which discredited Chiang Kai-shek’s government was planned in Washington by Assistant Secretary of the Treasury Harry Dexter White (CFR and Communist) and implemented in China by the Treasury Department’s representative, Solomon Adler, who was also a Communist agent.” –John Stormer, None Dare Call It Treason, pg 301.

It was also Assistant Treasury Secretary and Communist agent Harry Dexter White, in his support of Stalin, who “sent the Soviet Union engraving plates, paper, and ink to print occupation currency which was redeemable by the U.S. Treasury.”Hearings, Occupation Currency Transactions, Senate Appropriations, Armed Services and Banking Committee, 1947, pg. 8, 27, 175-9

Fri, 03/21/2014 - 13:06 | 4577572 shovelhead
shovelhead's picture


How smart is it to paint yourself in a corner?

Fri, 03/21/2014 - 13:12 | 4577598 JR
JR's picture


Sadly, however, it’s our corner.

Fri, 03/21/2014 - 12:20 | 4577323 New American Re...
New American Revolution's picture

Trapped wannabe Masterbators of the Universe is my call.

Fri, 03/21/2014 - 12:40 | 4577394 JR
JR's picture

…the Fed is a political entity and as a result it responds to political pressure like any other political entity…

Political pressure is definitely involved but the pressure comes from the Fed to the politicians and not the other way around; the pressure can easily be exerted by the owners of the Fed because they have the printing press and unlimited access to the US Treasury. Money is power.

The only reason the current owners of the Fed can be judged incompetent is that the unparalleled greed of this newest generation lacks the patience of their predecessors in their long-term plan for worldwide takeover. Side tracked by personal greed, their unprecedented and incompetent use of the Fed’s Keynesian economic system is now fracturing the economy on all sides, heading not just for a US economic collapse but for worldwide collapse.

It reminds one of bank robbers who couldn’t stand to divide the loot in a civilized and clandestine manner and began grabbing and fighting amongst themselves until they were found out.

QE and ZIRP are perfect examples of this lack of patience and greed to handcuff America to their new world order.

It is no surprise, therefore, that ongoing Fed policy continues to favor corrupt investment bankers while destroying America’s standard of living and her thrifty and hard-working middle-class at a an unprecedented rate.

The question: Is this brazen push for total power enough to awaken the sleeping giant?

The plan, of course, was and is to destroy America using inflation, foreign aid, war, treaty-making powers, central planning via socialism,  et cetera, with the Fed’s “fantastic control in government, financial circles, the media and the press, schools, etc. They do it using the concept of Keynesian social central planning and, in typical Fabian fashion, “never calling socialism by its true label.”

Obama came closest, calling it “Hope and Change.” You see, as in Dr. Carroll Quigley’s NWO tome, Tragedy and Hope, there can be no hope and no change for the financial elites' “new world order” unless American independence is destroyed.

P.S. If the Federal Reserve is not the power behind the politics, from whence does the idea to give Ukraine the backing and the money come, and from whence does the money come?

Fri, 03/21/2014 - 14:58 | 4578003 JohnnyBlaze
JohnnyBlaze's picture

Never go for the vault.

Fri, 03/21/2014 - 12:36 | 4577415 alfred b.
alfred b.'s picture


    Way too much political & financial power assigned to self-serving & fraudulent bankster cabal !!!


Fri, 03/21/2014 - 12:57 | 4577524 dumbStruck
dumbStruck's picture

I see central banking as an incurable disease with many many symptoms.
A competant central banker on the rare occassion when one shows up at a time when politics will allow him (her) to treat the illness, is only at best able to slow the progress of the disease. Central banking is a progressive illness which will eventually kill the peon suffering from it.

Fri, 03/21/2014 - 13:14 | 4577611 dumbStruck
dumbStruck's picture

It's questionable whether the competance or lack thereof of the central banker is even of any signifigance in the progress of a society into penury given the rarity of fiscal restraint of any sort during the course of the disease.

Fri, 03/21/2014 - 13:22 | 4577644 dumbStruck
dumbStruck's picture

Treatment options are limited for central banking, but some recent success has been reported in the use of nail guns.

Fri, 03/21/2014 - 14:14 | 4577842 YHC-FTSE
YHC-FTSE's picture

Much better article on solid ground by the author,  but like many here,  I doubt it is incompetence that is the driving force behind the Fed's decisions.  

We learn to break down any complex system into its smallest constituents to learn more about it. The vagaries of the economy are not beyond understanding. It is not some mysterious force that waxes and wanes at random, but rather at its core has flesh and blood human beings with their desires and aspirations steering the way. In the current case of the Fed, steering towards ultimate collapse with the willing participation of the entitlement brigade at both ends of the social spectrum,  the delusions of those who live beyond their means, and the wounded pride of a super power still pretending to be a force in the world by spending ludicrous amounts of 'money' backed by nothing but IOUs and threats of wholesale murder on those still productive or resource rich in the world. 

The national economy should be an extrapolation of the average citizen.  His work rate, contributions,  honesty, and prudence should reflect the true worth of a nation. If the bell curve tends to an irresponsible moron on entitlements,  then you have the problem right there. If the economic masters' projections diverge away from the truth to some skittles and unicorns future where the consequences of reality never interfere with their world views and their overestimation of themselves,  we have what we have today: Debts that can never be paid. That is, debts that can only be serviced by adding more debt. To infinity.  They know it. We know it. It's only a matter of time before all trust and faith disappears, hence the daily incantations of bullshit from the media that is increasingly becoming shrill, together with diversions ranging from girls vomiting on each other for entertainment to constant wars and hate hate hate bolstered by false flags and propagandists from the usual suspects.  

Interesting times indeed. 

Fri, 03/21/2014 - 14:48 | 4577956 Ellesmere
Ellesmere's picture

Very well stated.

Fri, 03/21/2014 - 15:53 | 4578262 Radical Marijuana
Radical Marijuana's picture

I concur that that was well-stated, YHC. Most of the votes for comments above support my overview, which I repeat:

There has been an historical degeneration of the FED. The FED was created by a cabal of evil geniuses, but it has degenerated more into a bunch of morons. Overall, the entire bankster system has developed to go out of human control. During that process, the banksters gradually degenerated from being the top predators to become more like parasites. In other words, the original creators of the FED were evil geniuses, operating as top predators, but, as time passed, and generation after generation grew up being taught to believe in bullshit, the FED ended up being run by morons, within a degenerate parasitical system, which is killing its host, because it does not know any better, because the best liars believe their own bullshit, to the degree that the radical truth is banished from their ability to consider the degree to which they are lying to themselves, as well as everyone else.

The FED is trapped inside of the paradox of final failure from too much successful fraud. The FED was the result of the international banskters applying the methods of organized crime to dominate the political processes, in order to legalize their counterfeiting of the public "money" supply. They have leveraged that up and up to dominate the funding of the school systems and mass media. They have thereby transformed the majority of Americans into Zombie Sheeple, being fleeced to exhaustion, while being set up to be slaughtered.

However, all of those truisms lead to a tragic denouement: the FED has gradually transformed from being the masters of the universe into being trapped incompetents. As their successful debt slavery systems drive themselves through towards the end game of debt insanity, the globalized systems of electronic frauds, backed by atomic bombs, are headed towards psychotic breakdowns. It is only the sheer insanity of that which is keeping it going at the present time ...

Fri, 03/21/2014 - 14:15 | 4577857 Armed Resistance
Armed Resistance's picture

This was one of my favorites from 2013:


If one wishes to truly understand the actions behind private Federal Reserve policy, one must come to terms with a fundamental reality - everything the Fed does it does for a reason, and the most apparent reasons are not always the primary reasons. If you think that the Fed simply acts on impulsive stupidity or hubris, then you haven't a clue what is going on. If you think the Fed only does what it does in order to hide the numerous negative aspects of our current economy, then you only know half the story. If you think the Fed does not have a plan, then you are sorely mistaken... Central Bankers and their political proponents espouse a globalist ideology, meaning, they are internationalists in their orientation and motivations. They do not have loyalties to any particular country. They do not take an oath to any particular constitution. They do not have empathy for any particular culture or social experiment. They have their own subculture, with their own "values", and their own social hierarchy. They are a kind of "tribe" or "sect"; a cult, if you will, that views itself as superior to all others. This means that when the central bankers that run the Fed act, they only act with the intention to support and promote globalization, not the best interests of America and Americans. The process of globalization REQUIRES the dissolution of the U.S. economy, as it exists today. Period. There is no way around it. America can no longer remain a superpower in the face of what globalists call "harmonization". The dollar can no longer maintain its petro-currency status or its world reserve status if total centralization under a new global currency is to be achieved. Globalists believe that America must be sacrificed on the altar of "progress", and diminished into a mere enclave, a feudal colony of a greater global system. The globalists at the Fed are no different. Once this driving philosophy is understood, the final conclusion is obvious - the Fed exists to destroy the U.S. financial system and the U.S. currency mechanism. That is what they are here for. This is why the dollar has lost 98% of its value since the Fed was established in 1913. This is why the Fed deliberately engineered the derivatives bubble crisis through the implementation of artificially low interest rates. This is why their response to the crisis was to create yet another massive bubble in stocks and bonds through QE stimulus. This is why the Fed is cutting stimulus today. - Brandon Smith, December 21, 2013
Fri, 03/21/2014 - 16:30 | 4578331 Radical Marijuana
Radical Marijuana's picture

Certainly, the FED was making a profit from killing off the American democratic republic. However, I believe that they are seriously risking that going out of control. Indeed, I feel that it has already gone out of control. The FED predators, degenerating into parasites, are acting out their social and psychological habits. They did not have to understand anything more than what was necessary during history to enable those personal and social habits to become dominant. Those habits do not have to be adapted to the future, merely because they were selected under past conditions to become dominant before.

Overall, I think that the real situation is trillions of times worse than guys like Brandon Smith, or Charles Hugh-Smith, present, (because, IF they were more realistic, then they would lose most of their audience approval.) The basic problems are that stupid little monkeys, believing in the bullshit of old-fashioned religions and ideologies, have gained control over powers and capabilities that have become trillions of times BIGGER, and are headed towards becoming quadrillions of times BIGGER STILL. Therefore, the total global debts, in which system the FED plays a leading role, are now measured in quadrillions of units, which are fantastic numbers based upon fantasies which depend upon backing up financial frauds with government force, for generation after generation, after generation!


Fri, 03/21/2014 - 20:31 | 4578965 honestann
honestann's picture

The predators at the federal reserve are competent.

They achieve their goals.

What people refuse to admit is obvious.  The federal reserve is owned by huge banks and financial entities, and has one purpose --- to assure those huge banks and financial entities survive, prosper, and never lose their power over their prey --- the productive population of earth.

The details do not matter.  From their perspective, the economy can boom, the economy can collapse, the economy can muddle along --- as long as they stay in power and realize enormous unearned wealth and power, they are successful.

And they definitely know what they are doing in the sense that... they are getting away with their predatory abuse and control of mankind, and no signs exist that they won't continue to get away with their plans.  The details of the economy are irrelevant to them, as long as they continue to accumulate wealth and power.

Since every disaster is accepted as a rationalization to "give them more power", they have ZERO incentive to take actions that make the economy better.  In fact, the worse the overall economy for "regular folks" is, the less able "regular folks" are to fight them.

They are competent predators.

Sat, 03/22/2014 - 01:00 | 4579654 Radical Marijuana
Radical Marijuana's picture

I agreed overall with your comment, honestann, except, as my 2 replies above stated, I believe that the once upon a time "competent predators" are degenerating into incompetent parasites.

The bigger the picture one looks at, the worse the human manifestations of evil deliberate ignorance become in terms of their longer term impacts upon the future of human life, and all life, on planet Earth! Predators that wipe out their prey are not competent! Only sick and insane parasites destroy their host.

Good predators provide a necessary ecological service to their prey. Runaway destructive parasites might not do that. Of course, predators and parasites are on a continuum, but the degree to which they maintain or destroy their prey is clearly an important issue.

Sat, 03/22/2014 - 17:59 | 4580929 honestann
honestann's picture

Without a doubt, the aggregate productivity of mankind is continuously falling, even as technology increases the mechanics of productivity.  While the predators want the prey to stay within their fenced-in pastures (approaching the entire planet at this point) to continue production, they don't want their prey to be capable of resistance.

The easiest way to assure their productive prey do not take effective actions against them is to leave them with little wealth and resources to implement any form of resistance (other than non-participation).  Well, that's the second easiest way.  The easiest way is to keep them confused, which is what the education system and media are for.

Personally, I'd rather be dead than serve the predators.  Of course, I am one of very few who actually have an escape plan that has more than a snowballs chance in hell to succeed, so my situation is a bit unusual.  But either way, I refuse to sanction or support the predators.

Which is my way of saying "screw degree... I won't stand for it".  Frankly, if producers aren't willing to fight, they SHOULD stop producing and let themselves starve to death along with the predators.  But that would require [moderately] unified action, and that will not happen.  Sadly, AtlasShrugged is fiction.

PS:  I have to laugh when people claim "the fed doesn't earn much off people".  That claim is so lame!  The fed is an agent for the huge banks and financial firms that own the fed (plus those who collaborate with the fed).  So it doesn't matter whether the fed goes broke or not, because fed actions cause wealth and power to flow into their owners.  Amazing that humans cannot notice even the simplest one-level misdirections. 

Sat, 03/22/2014 - 01:27 | 4579670 malek
malek's picture

Hmm, only at the end of the Catherine Austin Fitts interview can one detect that it was given in late 2011 or so...

Not that this invalidates her arguments, but it would still be nice for the perspective.

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