Why Doesn't Janet Yellen Resign?

Tyler Durden's picture

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

You would think, certainly if you were as naive and innocent as I am, that when you get offered the job of Chair of the Federal Reserve, you must be sure, before accepting, that you have the credentials and the knowledge required. If you don’t, it looks as if you don’t take the job seriously. Janet Yellen, who’s been Chair since January 2014, doesn’t seem to agree.

In a speech Tuesday for the National Association for Business Economics Yellen ‘honestly’ admitted that she doesn’t understand inflation, control of which is the Fed’s no.1 task (it’s debatable whether that’s a good idea). She doesn’t understand a bunch of other issues either. Those are her own words, not mine. Here are these own words:

“My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation..”

Clear enough, you would think. But she didn’t offer her resignation. And for an important post like Fed chair, that is a major problem. As she undoubtedly does. So why is she keeping her job? Doesn’t she realize that when you don’t understand the issues you deal with, you’re prone to make disastrous mistakes?

Yellen and her colleagues work with models, and the models are wrong. The Fed’s predictions for things like inflation are ridiculously off, all the time. That may be news to her, but it’s old hash for many people in her field. So that she’s surrounded solely by people who don’t understand these things either is not an excuse.

So what does she expect now? That she will start to understand them all of a sudden, after years and years of not being able to? That reality will change to comply with her models? We can discount the option that she will suddenly begin using entirely different models, they’re all she has. But what then?

Under her predecessor Ben Bernanke, who never conceded he had no idea either but still didn’t, the Fed lowered interest rates to near zero Kelvin and bought trillions of dollars in bonds and securities. Now Yellen for some reason thinks it’s time to get rid of the stuff.

But on what basis does she make such a decision, if she self-admittedly doesn’t even understand the fundamental forces in play? How is that different from handing a box of matches to a 3-year old? Isn’t she really simply an academic dropped in a casino? From CNBC:

Yellen said a regular pace of rate hikes ahead is likely still warranted, though Fed officials are looking closely at the assumptions underlying those projections. While conceding that the Fed may need to slow the removal of accommodation, she also said the central bank “should also be wary of moving too gradually.”

There comes a point when naive innocent me starts asking: what does that even mean? Rate hikes are warranted but we don’t know why? Accommodative policies have been going too fast but they shouldn’t be too slow? Based on what? It can only be based on models that have proven faulty, can’t it, because they have no others.

*  *  *

Here are a few pointers for the occupants of the Marriner S. Eccles Federal Reserve Board Building.

Inflation is money velocity multiplied by money and credit supply. MV = PY. M is money supply, V is velocity, P is price level and real GDP is Y.

Velocity of money means consumer spending. 70% of US GDP is consumer spending. But American consumers are neck deep in debt and have very little money left to spend. Much of what they spend, they must borrow.78% of Americans live paycheck to paycheck. So forget about money velocity.

 

Moreover, as for the Fed’s second mandate after inflation, full employment, they don’t get that one either.

They seem to act on the presumption that any one job is just like the other. And then bleat: “My colleagues and I may have misjudged the strength of the labor market”.

But America has turned into a nation where the gig economy (the natural successor to first the knowledge economy, then the service economy), waiters, greeters and people working 3 jobs just to make ends meet have become the norm. When in the present circumstances you claim to have almost ‘achieved’ full employment, as Yellen and the Fed do, you must really be blind as a bat.

The other side of the equation is money supply. Interestingly, the Fed has issued tons of it, but handed it all to its owner banks. If they had spent it inside the economy itself, we could have been looking at a whole other picture. If those trillions would have gone to investment, manufacturing etc., instead of propping up banks and companies buying their own shares, Yellen might have actually seen some inflation.

If Americans have no money to spend, there can not be inflation. Simple. But the same stupid faulty predictions just keep coming:

 

So why is anybody still paying attention to Janet Yellen? Well, because she has her finger on the biggest financial trigger on the planet. No matter how shaky and uneducated that finger may be. Or do we pay attention exactly because we know what’s behind that shaky finger? Do we all put everything on red just because grandma does it too?

The craziest thing of all is that in reactions in the media to Yellen’s speech, she’s praised for admitting she has no clue what she’s doing. That takes the cake. And eats it too. Praised for admitting you’re terribly unfit for your job. That’s just great. That’s Bizarro world.

It’s well past best before time to get rid of Janet Yellen, and all the intellectual but idiots who work at the Fed. What is it, 1,000 PhDs, or was that 10,000? But the only thing that makes any real sense of course, the only thing that can save the nation, is to get rid of the Fed and its braindead mandates, interests and occupants altogether.

Hedgeye got this one painfully right:

And yeah, I know Yellen could be fired too if she doesn’t resign, but with Goldman Sachs all over the White House, what are the odds? And who would come in when she goes? She’s ideal, who’s going to get angry at a barely 5′ grandmother even is she clearly out of her depth and league?

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JRobby's picture

Just confirming what we know.

The_Juggernaut's picture

She's making the right people rich.  Who says she doesn't know what she's doing?

illuminatus's picture

Exactly. It's such a lame and to me transparent explanation of failure. Like Bernanke, when he said he couldn't see the crash of 2007 coming. Total bunk. The Fed and their minions are large and in charge, they know exactly what they are doing.

ergatz's picture

Why Doesn't Janet Yellen Resign?

Because she's a Jewess (aka Fake Hebrew http://wp.me/p4OZ4v-Hn), and she couldn't care less what Americans think of her.

jcaz's picture

Mrs Doubtfire does exactly what she was appointed to- what she's told to do.   It's a bonus for them that she doesn't understand inflation, or economics, or finance,  or how to open a door- she never gets uppity.

DWD-MOVIE's picture

I'm making over $14k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://disq.us/url?url=http%3A%2F%2Fwww.Jobzon3.com%3Ab8eR_DQLwGRPVGtFvv...

hongdo's picture

Exactly.  Just focus on what they do and the consequences and ignore what they say.  I know it can be hard to finally really believe that some people lie blatently in spite of the facts and their own actions, but it is in plain sight over and over again. 

Commenting on what people say is being too lazy (or self-serving talking your own book) to actually look at the actions and effects and having enough confidence in your own analysis to put it out there and take responsibility.   "I know I was wrong but that is what they told me."

The entire govt is full of Bagdad Bobs and the MSM is full of Bagdad Bob regurgitation.  If someone lies to you, why do you even listen the next time they open their mouth?

t0mmyBerg's picture

Yes, still best article ever.

lester1's picture

Ole Yeller is just like Hillary. She thinks too highly of herself. She thinks she's entitled to the position.

Plus someone has to run the PPT.

NickyGall's picture

As shown in this article, the Federal Reserve and other central banks are facing an issue that they cannot defeat:

 

https://viableopposition.blogspot.ca/2017/07/demographics-central-banker...

 

Ms. Yellen is well aware that central bankers have no way to reverse the changes in the global economy.

USA USA's picture

Sorry to disagree, but SHE DOES NOT KNOW SHIT from SHINOLA!

JRobby's picture

The only thing Yellen studied was Greenspan's double talk "Fed Speak" which they all used to laugh about behind closed doors.

Haitian Snackout's picture

Post retirement trip to Bern in 3.2.1......

chestergimli's picture

These people are, for the vast most part Jews. What were they called in the thousands of years past? Who knows. They are just spitting a bunch of Jabbertalky at the rest of us. They, as well as their predecessors in the far distant past, know and knew that their monetary system was a failure. But by utilizing it, they made themselves kings for a day.

hongdo's picture

And amazed that it worked.  Ever make a serious bluff knowing it was obviously stupid and sweating like crazy waiting to get shot down, and then find it was successful?

Cautiously Pessimistic's picture

I would argue that she got the job on looks alone.   

(sarcasm tag, just in case one of you fools took me seriously)

NoWayJose's picture

She only has a few months anyway. If she can hold the economy and stocks and debt bubble from collapsing until then, she can leave peacefully and be hailed as the Fed Chair for a long expansion without a market crash. Lots of well paid speaking gigs, then good words for her obit and history books.

shizzledizzle's picture

I try to be mindful of the little indicators that are easily overlooked... I was just checking my email and saw the subject of "Fed News | Rates Stay Low | Lock Yours" from quicken loans. Now not only is my news saturated with what the FED is doing but now personal communications telling me what they are doing... I'm relectant to call a top but it sure seems that their jawboning is losing efectiveness and they are getting desperate. Ready for this Job to end so I can go to the farm, disconnect myself from communications and not have to listen about these thieves day in and day out. Ready for some fishing and hunting.  

 

hanekhw's picture

Her mirror tells her every morning who she is and she's always ready with that poison apple and her disguise should any competition arise. The apple isn't red. It's a golden delicious with a bitcoin sticker.

Rebelrebel7's picture

We have had it with this involuntary  servitude !

Imagine Dragons Redioactive:

https://youtu.be/ktvTqknDobU

Watch "John Lennon-Power To The People-Offical Video-HQ" on YouTube

https://youtu.be/RtvlBS4PMF0

aliens is here's picture

She'll resign once the economy goes into deep shyt and she'll cash out like a bandit.

Zepper's picture

Resign? Are you fucking kidding me! The Jew Tribe is going to start giving her medals... the woman tribe is going to start building statues of her to place in parks. 

 

Job well done Mrs. Stroke Victim. You have thoroughly fucked the middle class, while saving the wealthy and poorly run corporations. Mr. and Mrs. Jones are 65 and have yet to pay off their home and their children are still living with them working part time jobs at McDonalds with Bachelor degrees no less.

earleflorida's picture

inflation was controlled by a 'GOLD Standard'  (think btcoin @ $4100?), and gold, period!

'no need for a FRB System intervention mandate by a zionist congress'

https://en.wikipedia.org/wiki/Nixon_shock     (1971)

'unemployment [dual] mandate given FRB System by Zonist Congress' (symbiotic parasitic tape?worm metastasizing?)

http://www.gpn.org/bp191.html

rejected's picture

All they had to do was revalue the price of gold.

FDR did this, debasing gold from $20.67 to $35 about 60%.

People in 1933, just as people now, believe whatever the government utters and pay little to no attention to what government does. Why? Because it's easier and requires no action.

Government,,, once established,,,  is no better than the Mafia or other organized crime syndicates. Often much worse.

rejected's picture

The People deserved the FRB for not preventing its passage in the early 1900's

The present day People deserve the FRB for not demanding it's elimination.

Madison's_Ghost's picture

When you are driving a tank through daisies, it doesnt matter how good a driver you are, the daisies get crushed regardless.

 

short version:  The FED is the problem, not the its Chair.

KingTut's picture

Yellen would never resign, because she cannot understand why she should.  She is surrounded with people who think and believe exactly as she does.  They're all PhD economists, trained in the same theories and doctrines as she.  She worked her way up the Fed ladder by being a peacemaker and consensus builder, which to her way of thinking is exactly how the Fed should be run.

loves the truth's picture

End the Fed and especially fractional reserve banking.
Follow the constitution, the country has been high jacked by kikes

VWAndy's picture

 Its her job to do this kiddies.

Bai Suzhen's picture

Why should she resign?  What?  Is there another Jew waiting in line to take her place?

4johnny's picture

She and her cronies have screwed us all, she doesn't get to just walk away from this mess. 

FlKeysFisherman's picture

The author needs to understand that just because Yellen says something doesn't make it the case. She could be, wait for it, LYING.

The naivety in this country never ceases to amaze.

CARONTE-RAPTOR's picture

Basically the FED cheats and lies to everyone! In a private business you know and expect it, you can not blame it, but cheating the government and its citizens is not treason?

gregga777's picture

The sole, true mandate of Goldman Sachs' Feral Reserve System is to make the rich richer, by stealing from the poor and middle class, thereby greatly increasing income and wealth inequality. Any muppets, er, I mean suckers, er, whatever, that did not not lose everything in the bursting of the previous two bubbles, are scheduled for pauperization in the upcoming planned bursting of the third Feral Reserve System boom-bust cycle this century. The Feral Reserve System criminals are extremely proficient at enriching their obscenely rich masters. They will lie to anyone and everyone about their true purposes but, their actions shows all that anyone needs to understand their evil purposes.

The Goldman Sachs Feral Reserve System's motto is:

"We steal from those who can least afford it and give to those who least deserve it."

JailBanksters's picture

She's doing a great job

The Non-Jews are getting richer and the Jews are getting poorer.

 

much obliged's picture

Quote: "...when you get offered the job of Chair of the Federal Reserve, you must be sure, before accepting, that you have the credentials and the knowledge required."

I would have thought that whoever offered the job would make sure that the recipient had credentials.