Ron Paul Asks "What Did Fed Chairman Yellen Tell Obama?"

Tyler Durden's picture

As we reported yesterday, following the meeting held between Obama and Yellen last Monday, one reader tried to get some additional information on what was exchanged between the two most important people in the world beyond the cursory White House statement which is reposted below:

The President and Chair Yellen met this afternoon in the Oval Office as part of an ongoing dialogue on the state of the economy. They discussed both the near and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally. They also discussed the significant progress that has been made through the continued implementation of Wall Street Reform to strengthen our financial system and protect consumers.

Dissatisfied with the token boilerplate language, the reader requested the minutes from said meeting. The Fed's response: "we don't keep those."

 

It goes without saying that with both the White House and the Fed eager to prevent the disclosure of what was said leaking into the public arena, that it had to be quite important.

How improtant? Here is Ron Paul with his own take on the question of:

"What Did Fed Chairman Yellen Tell Obama?

 Last week, President Obama and Vice President Biden held a hastily arranged secret meeting with Federal Reserve Chairman Janet Yellen. According to the one paragraph statement released by the White House following the meeting, Yellen, Obama, and Biden simply “exchanged notes” about the economy and the progress of financial reform. Because the meeting was held behind closed doors, the American people have no way of knowing what else the three might have discussed.

Yellen’s secret meeting at the White House followed an emergency secret Federal Reserve Board meeting. The Fed then held another secret meeting to discuss bank reform. These secret meetings come on the heels of the Federal Reserve Bank of Atlanta’s estimate that first quarter GDP growth was .01 percent, dangerously close to the official definition of recession.

Thus the real reason for all these secret meetings could be a panic that the Fed’s eight year explosion of money creation has not just failed to revive the economy, but is about to cause another major market meltdown.

Establishment politicians and economists find the Fed’s failures puzzling. According to the Keynesian paradigm that still dominates the thinking of most policymakers, the Fed’s money creation should have produced such robust growth that today the Fed would be raising interest rates to prevent the economy from “overheating.”

The Fed’s response to its failures is to find new ways to pump money into the economy. Hence the Fed is actually considering implementing “negative interest rates.” Negative interest rates are a hidden tax on savings. Negative interest rates may create the short-term illusion of growth, but, by discouraging savings, they will cause tremendous long-term economic damage.

Even as Yellen admits that the Fed "has not taken negative interest rates off the table," she and other Fed officials are still promising to raise rates this year. The Federal Reserve needs to promise future rate increases in order to stop nervous investors from fleeing US markets and challenging the dollar’s reserve currency status.

The Fed can only keep the wolves at bay with promises of future rate increases for so long before its polices cause a major dollar crisis. However, raising rates could also cause major economic problems. Higher interest rates will hurt the millions of Americans struggling with student loan, credit card, and other forms of debt. Already over 40 percent of Americans who owe student loan debt are defaulting on their payments. If Federal Reserve policies increase the burden of student loan debt, the number of defaults will dramatically increase leading to a bursting of the student loan bubble.

By increasing the federal government's cost of borrowing, an interest rate increase will also make it harder for the federal government to manage its debt. Increased costs of debt financing will place increased burden on the American people and could be the last straw that finally pushes the federal government into a Greek-style financial crisis.

The no-win situation the Fed finds itself in is a sign that we are reaching the inevitable collapse of the fiat currency system. Unless immediate steps are taken to manage the transition, this collapse could usher in an economic catastrophe dwarfing the Great Depression. Therefore, those of us who know the truth must redouble our efforts to spread the ideas of liberty.

If we are successful we may be able to force Congress to properly manage the transition by cutting spending in all areas and auditing, then ending, the Federal Reserve. We may also be able to ensure the current crisis ends not just the Fed but the entire welfare-warfare state.

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NoWayJose's picture

I think Yellen said - we're buying commodities! The whole basket went parabolic after that meeting.

t0mmyBerg's picture

Sort of.  The question posed above is the wrong question.  The quesiton is not what Yellen told Obama, but what Obama told Yellen, his compliant and non-independent lackey.  Something along the lines of "We need the dollar to back off as it is causing a credit crisis that could blow up before I am out of here. Thanks".  That then explains the commodities complex turning up and HY as well as higher crude helps forestall quite so much bankruptcy at the margins.

santafe's picture

No tommyboy, she REVEALED to him what all US central bankers have in common.

http://wp.me/p4OZ4v-Hn

knukles's picture

She says nots to worry Mr Bossman Sir, dere be plenty cotton ta pick dis yeah.

Four chan's picture

obama is overseas getting his last zog end game orders as manchurian candidate.

John Kich's picture

Trump Got It Right Again. This Is the Undeniable Proof...

However the mainstream media isn't saying a word about it!

What are they really trying to cover up?

www.legitorscamreview.com/the-final-bubble

dogfish's picture

A Greek-style financial crisis,is this as bad as it sounds?

Squid-puppets a-go-go's picture

kinda OT, but in a fractionally reserved system, is anything preventing a bifurcated interest rate policy?

Like, savings deposit rate 5%, loan repayment rates 1%  I'm not sure ive thought through all the implications of that idea, but its no less absurd than negative interest rates, surely....

One World Mafia's picture

WHAT DID RON PAUL TELL BERNIE SANDERS AFTER HE SOLD OUT TO BANKING INTERESTS AND GUTTED HIS AUDIT (video is posted on Ron Paul's Campaign For Liberty youtube page):

https://www.youtube.com/watch?v=7II2diHymv4

His “compromise” is what the Adminstration and banking interests want

The White House would not have gone to Sanders if they’d been able to peel off the votes to tank the amendment. But with 68 Senators having voted for it or cosponsored it in the past year, that was a heavy lift. Bernie was the weak link.

https://shadowproof.com/2010/05/06/ron-paul-says-bernie-sanders-sold-out-sided-with-chris-dodd-to-gut-audit-the-fed/

http://www.infowars.com/bernie-sanders-gets-endorsement-from-soros-moveon/

 

Oracle of Kypseli's picture

O'Bummer wants to save the banks from the loans to small oil companies and he wants $40+ oil price until the banks clear the books. Yellen first, Saudi next, all clear now.

Prediction: In a few months oil will hover around $40 and then, have a nice day. Once the small oil companies get out of the way, watch oil go to $60 as countries will then agree to manipulate production levels. There is no room fo marginal players.

Seer's picture

I'm pretty sure I'm at 10 years now since I was heavily involved in discussions pertaining to future pricing of oil.  At that time, as has been my continued position, I stated that it matters NOT what the "price" is  but how affordable oil is.  Given that the world is in global growth decline I find it hard to believe that higher prices can be the norm when so many more people are less able to afford it.

The least-cost producers will continue to try and dominate the market and drive off as many competitors that they can.  And, let's face it, this is how markets are supposed to work!

Troy Ounce's picture

 

 

0.1% GDP growth?

GDP calculations have a margin of error of between 1.5 and 3%.

So GDP growth is 1.6%, no?

 

Professor Fate's picture

I have it on good authority that the emergency meetings were all about Deutsche Bank and the fact they're about to rat out every major bank that was involved in precious metals price manipulation.  A major banking crisis is upon us.

Unfortunately, the presidential brain trust didn't understand a word she said but did say he had some great news.  As of that afternoon, she and Michelle could begin using the men's room in any Target store in the country.  She broke into her happy dance.

Fate the Magnificent
"Push the Button, Max" 

Thom_333's picture

We all know how this will end...War.

But the armaments will kick-start a lot of economic avtivity.

It will interesting to see the millenials walking thru the fire.

Infinite QE's picture

"auditing, then ending, the Federal Reserve"

Rendition it's owners, confiscate their wealth, then publically hang them along with all of their syncophants.

Charles Wilson's picture

The Alexander Jannaeus solution...

Seer's picture

And we'll still be in debt/broke and with no ability to create growth (demographics being a huge part in why).

Not defending the banksters, just pointing out that no one seems to attend to the question of: "And then?"

Enter the lawyers... (and or the Generals)

The perpetual growth system, of which the banksters were only doing their part to maintain (once physics started taking over it was essential to start manipulating the numbers in order to make the system still "function"), is ending.  Until someone comes up with some system that can operate under a no-growth scenario we're doomed to continue to squeeze rocks to get blood.

That said, I'm fine with the first step in the purging of the system (will be hard for it to not occur; and, sadly, people will clamor for a return to "growth").

Colonel Klink's picture

Be sure to kill all the parasites family members too or the cancer will just grow back.

matermaker's picture

yeah.... that will work, Ron....     put soldiers out of work. cut food stamps and other government assistance.   'cause austerity always works.     Nothing works to bring a nation forward quite like a disenchanted, broke and hungry military and a social net taken out from underneath the populus..  It worked great in Iraq.

 I like you Ron, but you keep holding onto this idea that things can be fixed.   They cannot.   Only a burning of the fields will allow for new growth.  People must pay, die and suffer for the excesses of the generations before them..   like yourself.

matermaker's picture

There is one and only one way to ease the woes of the world.   KILL DEBT.   Debt is not productivity, nor is it resource nor innovation.   Debt is not transitory nor does it have any value whatsoever in growth if it is known that the debt is unsubstainable.   WE ALL KNOW the debt is not repayable.  You cannot repay the debt as the SYSTEM IS CREATED BY DEBT.

The system must be reset, that simple.   As painful as it is to old fuckers whom have all their life's accumalated wealth tied up in it.   The old overgrowth must be burned off in order for new growth to happen.  Do none of you old bastards ever walk in the woods?   Even you Ron?

Antifaschistische's picture

RP, as much as anyone on the planet knows we are screwed. And if we went with the fairy tale elimination of all debt (which I'll support) we're still all screwed because every behavior of man is based on a combination of perception and expectation...and to erase all the perceived wealth in the world would also turn us into a real life Walking Dead episode.

matermaker's picture

Happens all the time throughout the history of mankind.    have the balls to recognize it's due.    Only rich people percieve wealth as some abstract binary digits in a computer.   The vast majority of humans don't live that way.    Even the vast majority of Americans don't.  You fail to understand what most humans understand as 'wealth' in its most basic form.

EVEN YOUR GOLD was likely born on the backs of the men that labored beneath the earth to dig it out and bring it to you.

THAT in essence, is where wealth comes from.

Antifaschistische's picture

I get it Yoda....but let me give you an example. You know how big the bond market is. It dwarfs the equity market. The bond market evaporates? Every insurance company blows up. Every pension plan blows up. The Assets (investments) .on million of Balance Sheets get hammered. Don't get me wrong. I'm not disagreeing with you...but there are consequences also...it's not free.

...and debt is not evil. I borrow an egg from you today...I give you an egg next week. The problem is the way credit is invented without a corresponding saver through the FEDs single entry accounting.

matermaker's picture

Borrow an egg from me today, give me an egg, next week, is one thing.     Give me two eggs next week is another.  It means for every egg I create, two more are created.  Soon.... and surely you understand this..    there are so many frigg'n eggs, nobody wants them.  This has always been the problem with usuary and understood over the eons.  Eventually, a society has 'wealth' when they didn't do shit.    They just had a few dozen eggs and turned them into exponentially more.

I'm fully aware of what is coming.   People in this nation can't even wipe their ass without the complex distribution chain.

The last time any disruption of anything in this nation was in WWII.  Back then, more people at least grew some corn cobs or a victory garden than lived in urban settings completely reliant.

Sure, it will be quite painful.   Nonetheless, people need to learn how to be productive for themselves again.

This is my beef with Ron.   He understands how bloody and destructive it will be.   Just like a forest fire.  But, it's the only way for the survival of the forest.  Just won't say it....

Billy the Poet's picture

Why would an individual who lends one egg for a later return of two eggs suddenly decide that he didn't want any eggs to begin with? how could such a situation turn into a systemic problem when it is unlikely that an overwhelming number of individuals would transact their business exclusively in eggs? It's likely that egg based trades would only be engaged in by those who have an active interest in producing or consumption eggs. Also, eggs can be powdered or otherwise preserved if a temporary glut reduces the value of eggs.

matermaker's picture

I'll give you an example, billy.     In the '70s Henry Kissenger went to the Saudi Arabian Government.  He made a deal with them that they would only sell their oil in...... wait for it.... not eggs.... but US dollars.    which are also created on the sytem or exponential creation.  The deal was, the US would sell them tons of weapons and goods, on the cheap, make sure nobody messed with them in the bad neighborhood of the the ME in the 70s and share the spoils.

So, look at the global economy and replace 'eggs' for 'dollars' and understand.

Billy the Poet's picture

But eggs are a real and useful commodity while dollars are not. Eggs constitute inventory while a dollar is nothing but a unit for measuring debt.

matermaker's picture

tell an aircraft carrier that.

Billy the Poet's picture

What do you believe the aircraft carrier would say in response?

I think that it would say, "I have six thousand crewmen aboard. I'll take every egg you've got."

matermaker's picture

something like that....    it says, "do commerce in dollars or we will kill you..."      rather happened a few times over the last decade or two.

Billy the Poet's picture

How does that relate to your premise that when people borrow eggs an economy destroying egg glut ensues? You're all over the map.

flyingcaveman's picture

I think it would say "powdered eggs are exactly the same, orange generic kool-aid is fresh squeezed orange juice, and hot dogs are filet mignon."

Seer's picture

Dead wood doesn't only occur with "old wood."  And, yeah, I walk in the woods: it's where I get my firewood.

Wipe out debt and then what?  Anyone who then jumps up and states  that we can then have "growth" is only cycling up the same problematic game again.  When we understand that we can't have perpetual growth on a finite planet is when we put an end to the tricks that we have allowed ourselves to fall for.

BTW - Most farmers are older.  Kill off all us "old wood" and I don't think it'll turn out all that well.  NEVER think a problem through to only one level...

Antifaschistische's picture

"The no-win situation the Fed finds itself in is a sign that we are reaching the inevitable collapse of the fiat currency system.”

How did you interpret this as Ron thinking things could be fixed?

matermaker's picture

Through his pacifist and hiporcatic oath nature of thinking things can be reconciled peacefully.   He was in congress for how many years?   He belies his followers as I feel certain he's intelligent enough to understand what is coming down the pike.  Just sugar coats it.  Plays along with the system in order to keep a voice.

Billy the Poet's picture

You meant to say that Ron Paul lies to his followers or that the true situation belies Ron Paul's assertions. But in either case your statement would still be as incorrect as your original draft.

matermaker's picture

no... it would not.      Ron Paul never had the fire and gunpowder to do what needs to be done.   I do not begrudge the man for upstanding morals.    However, the guy that sends brownshirts into the streets will have built his beliefs upon the reality that Paul illustrated.   The anger, the mistrust of government, the abuse by bankers, corporations and the MIC...

This is just how it's going to work out, sorry.

Billy the Poet's picture

You can apologize all you want but that doesn't change the fact that Ron Paul educated thousands if not millions of people around the world about a variety of important issues. Just because he didn't turn into a giant robot and slay all enemies like some kind of low brow cartoon doesn't indicate that the man's life's work was not far reaching and positive in nature.

matermaker's picture

Oh really?      At the end of WWII America was the only one left standing.  Russia, China, Germany, Great Britain, France, Japan, everyone... was destroyed if not nuked.    We swept in and took advantage of that.   ONE generation later... as I hit my 40s...  There is coming payback....     Does Ron Paul ever talk about that?

Billy the Poet's picture

Ron Paul frequently addresses the issue of US dollar hegemony backed by military might and the coming end of that arrangement.

matermaker's picture

the due is in blood and toil.      there is no human way around that.  does he discuss how we deserve it?    we've raped a conquested planet for 70 years.

Billy the Poet's picture

It's becoming apparent that you've spend very little time listening to Ron Paul.

matermaker's picture

nah.. i do.... but, he's no Robespierre.   Too nice... too hopeful about human nature.  in the last 100 years, how many velvet revolutions have there been?   "power never concedes anything without a demand.  it never has it never will." -fredrick douglas

As much as I like Paul, his conecpt and reality of common humanity is failing.   If he does actually understand that human revolution is never peaceful, then he's too much of a pussy to preach it.

Billy the Poet's picture

he's no Robespierre.   Too nice.

 

So you want Ron Paul to inspire a movement in which thousands of individuals are summarily executed including himself? What do you believe would be the advantage to Ron or anyone else in such a scenario?

matermaker's picture

unfortunately, yes.      It really sucks about people..   The amount of psychopaths, the level of folks whom are sadistic and not only derive pleasure from the pain of others, but go out of their way to see it...

However, I don't need to be one that wishes for this or that one to make it or have a voice.  I have almost no sadistic tendencies.  Though, I'll cut your throat if I need to.    Read the Marquis La Sade's "120 days of Sodom" if you want to start to understand just how different people are.

Ron Paul will never be the one to go down that road, neither will I.   Though, I'm not trying to preach to the masses.   What I would say is like waiting for the worms.

Billy the Poet's picture

unfortunately, yes.

 

Then go ahead and lay your head on the chopping block. Your role model Robespierre did.

matermaker's picture

I don't need to.   you can't even wipe your ass without a distribution chain that has been formed since the end of WWII.  can't eat... can't do much of anything.    I reckon the only thing I can do is answer the calls for help, yes or no.

Billy the Poet's picture

Venezuela is plagued with multiple shortages including toilet paper. I hear that they plan their day so that they poop before they shower. There's always a practical solution for those who don't have access to global supply chains. As a farmer you should know that.

matermaker's picture

haha!   do you think families in northwest arkansas in say the early 1930's or 40's bought toilet paper?     were they desperately unhappy because of it?  frigg'n asshats never realize that life always goes on... and that is called commerce.