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Janet Yellen Is Caught Between A Rock And A Hard Place
Via Monty Pelerin's World blog,
“Caught between a rock and a hard place” is a colloquialism meant to convey that there are either no options or at least no good options left. That describes quite nicely the position that Janet Yellen has been put into.
The US (and world) economy are not growing. Ben Bernanke and his counterparts in other countries pumped like mad to hide the dysfunction. Flooding with liquidity did nothing to heal the distortions and made them worse.
In his last meeting, Bernanke began to “taper.” Ms. Yellen came into this no-win situation, made worse by Bernanke’s parting shot. I suspect Bernanke was attempting to mitigate his role in the inevitable disaster that lies ahead. He will likely claim that the economy was doing fine when he left and that was why he began to reduce QE.
The implication Bernanke hopes to convey is that the economy was just hunky-dory when he departed. If this interpretation is correct, then Bernanke is truly a loathsome person. If, on the other hand, Bernanke truly believed that the economy was fine, then loathsome is an improper description. However, that brings “stupid” into play as it is just another in a long line of examples that suggest Bernanke had little to no understanding of what was happening.
Perhaps his most famous prediction was believing the housing market was fine prior to the crash. Silverunderground reported:
In January of 2007, Ben Bernanke said, “The housing market has looked a bit more solid, and the worst outcomes have been made less likely.” His view was that the fundamentals in housing were improving, thus reducing the risk of a crash.
The graphic below provides other examples (click image to enlarge):
There is no way to stop infusing liquidity into the economy without creating a massive recession/depression. The withdrawal process is much like that of a heroin addict. It is hell, but if you get through it, you will regain your health. Jim Sinclair explains:
The idea that stimulation, even if only in form but not reality, can be withdrawn without draconian economic results is simply false. Chair Yellen is truly dedicated to full employment and is going to go into shock over the next few short months at the divergence between her economic modeling, the behavioral economic projections and the degree of economic contraction in the US. She will revert to her long standing dovish viewpoint of the mandate of the Federal Reserve and move this hyper stimulation (4 trillion) into a higher gear than before.
Mr. Sinclair is correct in his conclusion. Whether his timing is correct will be known soon.
Bernanke, attempting to avoid historical comparisons to John Law, left Ms. Yellen holding this smelly bag. His exit does nothing to absolve himself from the blame. He and his predecessor Greenspan created the monster that will devour the economy. Regardless of whether Yellen is a hawk or dove, there is no avoiding what is coming. The Bernank is to blame, although Ms. Yellen will likely make matters worse in an effort to avoid the politically unpalatable outcome.
Political reality (Obama and Democrats plummeting in polls and likely to get slaughtered in the next election) suggest that Ms. Yellen has little time to continue the pretense of tapering. Her message from the last Fed meeting suggests she is laying the groundwork. The hard red line of 6.5% unemployment has been removed and replaced by some amorphous judgment call pertaining to economic conditions.
Ms. Yellen’s reversal will be hot on the heels of the first set of bad economic data. Markets, if they can hold out until then, will probably continue to rise after the policy change becomes public.
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"There is no way to stop infusing liquidity into the economy without creating a massive recession/depression."
Get that horse back in front of the cart. The boom causes the bust. There is no way to prevent creating a massive depression, once one infuses massive liquidity into the economy.
Egg truly believes intervention works. He doesn't understand market forces, therefore he will never understand why failing things need to fail.
"But, but, if we just buy more foreclosures...,"
Being an Egg, he is simply hoping the great Humpty Dumpty moment never arrives.......
I would say that intervention can work if the goal is limited. Egg gets it wrong on both what it can accomplish AND what the FED is using it for in the first place. The fact that he doesn't equate QE's stated goal of increasing bank liquidity was ultimately to increase the velocity of money (which you always need to get out of a recession) shows he really doesn't see how all this stuff goes together. Furthermore he doesn't see that the cover of increasing bank liquidity was bullshit to justify a huge wealth transfer. He's a little out of his league it seems...
I know intervention doesn't work. Thats why I own 2 million dollars in Bitcoin.
Whats good fonestar?
If this was an epic Saturday Night Troll for Fun, good job LOL. You did fuck up on the nationalization thing by not reading my post correctly, but other than that a fun trolling. Welcome to Fight Club.
Most of it wasn't. but good shit
Lol
Eggslayer - You missed out on the 80's and 90's which were pretty awsome. You missed out by seven years to be the Wolf of Wall St. Investors are fewer in number and far more risk adverse these days. At 21 such a movie must have great appeal for you.
At 21 I dreamed of fast cars, fast pussy and drugs too. That loses its luster as you get older. Good luck on your career. Your going to find it boring because these are the boring years at least for seven or so more of them.
I fucking loved that movie. How many downvotes is this one gonna get?
One from me as that is really what we do not want.
The markets are going to rise. They are one of the ways the FED prints to bribe congress. The markets will continue higher but now that foreign nations and those that control of huge asset/wealth pools recognize they need to take action against specific oligarchs and individuals that control the US the waters are bound to be choppy. NSA screwed itself and the Washington D.C. gang. I think the Rockefellers and Rothschilds will become the main targets in the upcoming wars to restore law and order. Could be anyone associated with the Bilderberg Group, the Carlyle Group, the CFR or the Committee of 300. Definitely wouldn't want to be associated with any of those gangs at this time.
Ummmm...yeah. The real fun starts when they have to stop the taper at some point. Because then the S&P goes into overdrive while everything else stagnates more. At that point they won't be able to suppress gold.
You have to put yourself in the mind of a Wall St. Sociopath. They think this is all normal, the market is where it is on earnings and the US economy is about to come roaring back.
The Emperor is about to be unclothed
Egg are you a fucking retard? I mean really, I believe you are one of those highly functioning ones that gave us hope and change. You don/t understand that 1 + 1 =2. The best solution for TARP would have been an AK-47 to the Capital and the White House. Government Fucks everything up, They just need to get the fuck out of the way and the problem will take care of itself. Nature is the best decision maker, not some corrupt fucking politicians who only want more power. You should have shot all of them in 2008, you missed your chance to contribute to society, that would have help fix the problem. Really, nature and peoples ingenuity would have solved it in time, not fucking TARP you dumb fuck. Now go blow your nose son you got snot pouring out or is that CSF.
I almost feel a little sorry for her.
Maybe only like a drop of blood in an ocean, just the littlest sorry for her.
I stll don't feel bad for her destiny with the guillotine.
NO.
NO.
NO.
Yellen could pull a "Volker" (in the sense of doing something most people would not expect), blow the financial sector to kingdom come, let the chips fall where they may, and let the economy and spending by the predators-DBA-government come to equilibrium. She could do this by "end the fed", or simply by no-longer manipulating the market (just sell the $4.5 trillion of "excess" on the fed balance sheet).
Yes, she won't. But she COULD.
Yellen is NOT between a rock and a hard place. Yellen is the one turning the handle on the vice that continuously pushes the rock and hard place closer together.
The honest, ethical, productive, benevolent humans on this planet are between a rock and a hard place. And that rock and hard place are continually moving closer together, squishing the very people that the life of everyone depends upon. Those folks should "shrug", but they won't.
Those who survive will be utterly enslaved, the efficiency of mankind will fall like a stone, and the predators-that-be will live their life of luxury while everyone else suffers and dies.
http://www.safehaven.com/article/33279/gold-and-silver-they-are-money
Living in America, prior to the 1930s, if you went into a bank with a US Treasury Note of any denomination, you could exchange it for gold or silver, for all currency was specie-backed, even the Federal Reserve issue, which circulated side-by-side with US Treasury Notes, [those issued by the US government and not the private corporation known as the Federal Reserve].
After the elites forced the US into bankruptcy in 1933, when FDR declared a bank holiday and shut the system down for several days, when the banks reopened, it was the foreign-owned Federal Reserve that was in charge of the entire banking system, finally. [We add "finally," because that was the objective of the Rothschilds for over 50 years even before 1933, actually longer, but it gets too complicated to explain.]
A man goes into a bank, prior to 1933, and hands over a $100 US Treasury Note, or even a Federal Reserve Note, which also was specie-backed, at the time, and asks for $50 in gold and $50 in silver. No problem.
Sometime after 1933, a man goes into a bank with a $100 Federal Reserve Note and asks for $50 in gold and $50 in silver.
Banker: "Sorry, sir. There is no gold or silver backing for your $100. Would you like two $50 Federal Reserve Notes, instead?"
What happened?
When the Federal Reserve Act was passed, two days before Christmas in 1913, when most politicians were home on holiday, the Act was passed with no opposition by the remaining chosen politicians who stayed on, and were well paid to do so by the Rothschild-backed bankers. And so the most treasonous act against the Constitution was passed.
Here is how the rest of the plan was carried out: The Federal Reserve issued its own currency, also specie-backed, to circulate along with the US specie-backed Treasury Notes. This went on for a few decades, which is a short period of time for the Rothschilds. What happened was, people saw the new Federal Reserve Notes, along with Treasury Notes, but it made no difference because both were equally backed by, and could be exchanged for gold and silver on demand, at any bank.
After 1933, when the Federal Reserve took over control of the money supply, it began to slowly withdraw all US specie-backed Treasury Notes and had them destroyed! Nobody paid attention to the disappearance of the US Treasury Notes because Federal Reserve Notes were the same thing, in their minds, and in reality. This was all planned, decades in advance. It was a part of the Rothschild formula for well over a hundred years even before that.
Something else happened very gradually, over time, and almost immediately after 1933. All Federal Reserve Notes that were specie-backed were also withdrawn from circulation. All of the US Treasury currency issued by the United States government had already been removed and destroyed. All that was left were Federal Reserve Notes, backed by the full faith and credit of the United States. Fiat. Again, people had come to accept Federal Reserve Notes in circulation at the same as Treasury Notes, so when all that was left were the Federal Reserve Notes, it did not matter because people could still buy and sell whatever they wanted and did as in times prior to the financial bait-and-switch.
All the gold and silver owned by the United States government was stolen, taken by the elite-owned Federal Reserve central bank. The central bank controlled the government and the media. The public was fed the kind of news that never let on to what happened during those decades, and the public has since been dumbed down even further in all the other decades to date.
Name one retired FED chair or member that is not a multimillionaire many times over?
Yellen, another Jew, (that makes 40 yrs that we have not had one Gentile in that omnipotent post) is doing what she is paid to do.
Keep the Jewish mafia on Wall Street, Fleet Street, and Stamford Rd (singapore) in great riches forever.
Nothing else matters.
Last year I wrote if the goal is to continue until the unemployment problem abates, the Fed will never stop or dial back on QE, the economy is totally dependent on the props and cheap easy money that flows from the Fed. Thus the only way out of the trap Bernanke has built is to hand off the office and program to someone else.
The second part of this exit strategy was to run or distance himself from the blow-back and negative implications of his disastrous policies and let the blame fall on those that follow. After years of market manipulation he and the group that have learned to control the direction of the market are masters, even if dark storms begin to gather, a few more days or weeks of keeping the balls in the air while difficult should not be impossible. Ben played this well, more in the article below.
http://brucewilds.blogspot.com/2013/05/bernankes-best-qe-exit-strategy.html
I contend that never before has mankind diverted such a large percentage of wealth into intangible products or goods and this is the primary reason that inflation has not raised its ugly head or become a major economic issue in recent years. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply. If money suddenly flows into tangible goods seeking a safe haven inflation could soar even as debts go unpaid and promises are left unfilled. More in the article below.
http://brucewilds.blogspot.com/2014/03/few-people-really-understand-econ...
"Neither the Debt nor the Deficit Matter".
I'm beginning to agree with Cheney.
Dickhead.
No, we've already been provided the script for the coming decline. Its all congress fault, and specifically, its the fault of Republcans for not approving massive new government spending programs. Forget about the millstone the debt will be around the American economy. Paul Krugman already told us stimulus should have been $10 trillion!