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Robert Wenzel's 'David' Speech Crushes Federal Reserve's 'Goliath' Dream

Tyler Durden's picture




 

In perhaps the most courageous (and likely must-read for future economists) speech ever given inside the New York Fed's shallowed hallowed walls, Economic Policy Journal's Robert Wenzel delivered the truth, the whole truth, and nothing but the truth to the monetary priesthood. Gracious from the start, Wenzel takes the Keynesian clap-trappers to task on almost every nonsensical and oblivious decision they have made in recent years.

"My views, I suspect, differ from beginning to end... I stand here confused as to how you see the world so differently than I do. I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality."

and further...

"I scratch my head that somehow your conclusions about unemployment are so different than mine and that you call for the printing of money to boost 'demand'. A call, I add, that since the founding of the Federal Reserve has resulted in an increase of the money supply by 12,230%."

But his closing was tremendous:

"Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats."

The Full Speech is below:

Thank you very much for inviting me to speak here at the New York Federal Reserve Bank.

 

Intellectual discourse is, of course, extraordinarily valuable in reaching truth. In this sense, I welcome the opportunity to discuss my views on the economy and monetary policy and how they may differ with those of you here at the Fed.

 

That said, I suspect my views are so different from those of you here today that my comments will be a complete failure in convincing you to do what I believe should be done, which is to close down the entire Federal Reserve System

 

My views, I suspect, differ from beginning to end. From the proper methodology to be used in the science of economics, to the manner in which the macro-economy functions, to the role of the Federal Reserve, and to the accomplishments of the Federal Reserve, I stand here confused as to how you see the world so differently than I do.

 

I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality.

 

Please allow me to begin with methodology, I hold the view developed by such great economic thinkers as Ludwig von Mises, Friedrich Hayek and Murray Rothbard that there are no constants in the science of economics similar to those in the  physical sciences.

 

In the science of physics, we know that water freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed.

 

There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time. If potato prices remain the same for 10 weeks, it does not mean they will be the same the following day. I defy anyone in this room to provide me with a constant in the field of economics that has the same unchanging constancy that exists in the fields of physics or chemistry.

 

And yet, in paper after paper here at the Federal Reserve, I see equations built as though constants do exist. It is as if one were to assume a constant relationship existed between interest rates here and in Russia and throughout the world, and create equations based on this belief and then attempt to trade based on these equations. That was tried and the result was the blow up of the fund Long Term Capital Management, a blow up that resulted in high level meetings in this very building.

 

It is as if traders assumed a given default rate was constant for subprime mortgage paper and traded on that belief. Only to see it blow up in their faces, as it did,  again, with intense meetings being held in this very building.

 

Yet, the equations, assuming constants, continue to be published in papers throughout the Fed system. I scratch my head.

 

I also find curious the general belief in the Keynesian model of the economy that somehow results in the belief that demand drives the economy, rather than production. I look out at the world and see iPhones, iPads, microwave ovens, flat screen televisions, which suggest to me that it is production that boosts an economy. Without production of these things and millions of other items, where would we be? Yet, the Keynesians in this room will reply, “But you need demand to buy these products.” And I will reply, “Do you not believe in supply and demand? Do you not believe that products once made will adjust to a market clearing price?”

 

Further , I will argue that the price of the factors of production will adjust to prices at the consumer level and that thus the markets at all levels will clear. Again do you believe in supply and demand or not?

 

I scratch my head that somehow most of you on some academic level believe in the theory of supply and demand and how market setting prices result, but yet you deny them in your macro thinking about the economy.

 

You will argue with me that prices are sticky on the downside, especially labor prices and therefore that you must pump money to get the economy going. And,  I will look on in amazement as your fellow Keynesian brethren in the government create an environment  of sticky non-downward bending wages.

 

The economist  Robert Murphy reports that President  Herbert Hoover continually pressured businessmen to not lower wages.

 

He quoted Hoover in a speech delivered to a group of businessmen:

 

In this country there has been a concerted and determined effort  on the part of government and business... to prevent any reduction in wages.

 

He then reports that FDR actually outdid Hoover by seeking to “raise wages rates rather than merely put a floor under them.”

 

I ask you, with presidents actively conducting policies that attempt to defy supply and demand and prop up wages, are you really surprised that wages were sticky downward during the Great Depression?

 

In present day America, the government focus has changed a bit. In the new focus, the government  attempts much more to prop up the unemployed by extended payments for not working. Is it really a surprise that unemployment is so high when you pay people not to work.? The 2010 Nobel Prize was awarded to economists for their studies which showed that, and I quote from the Noble press release announcing the award:

 

One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times.

 

Don’t you think it would make more sense to stop these policies which are a direct factor in causing unemployment, than to add to the mess and devalue the currency by printing more money?

 

I scratch my head that somehow your conclusions about unemployment are so different than mine  and that you call for the printing of money to boost “demand”. A call, I add, that since the founding of the Federal Reserve has resulted in an increase of the money supply by 12,230%.

 

I also must scratch my head at the view that the Federal Reserve should maintain a stable price level. What is wrong with having falling prices across the economy, like we now have in the computer sector, the flat screen television sector and the cell phone sector? Why, I ask, do you want stable prices? And, oh by the way, how’s that stable price thing going for you here at the Fed?

 

Since the start of the Fed, prices have increased at the consumer level by 2,241% [3]. that’s not me misspeaking, I will repeat, since the start of the Fed, prices have increased at the consumer level by 2,241%.

 

So you then might tell me that stable prices are only a secondary goal of the Federal Reserve and that your real goal is to prevent serious declines in the economy but, since the start of the Fed, there have been 18 recessions including the Great Depression and the most recent Great Recession. These downturns  have resulted in stock market crashes, tens of  millions of unemployed and untold business bankruptcies.

 

I scratch my head and wonder how you think the Fed is any type of success when all this has occurred.

 

I am especially confused, since Austrian business cycle theory (ABCT), developed by Mises, Hayek and Rothbard, has warned about all these things. According to ABCT, it is central bank money printing that causes the business cycle and, again you here at the Fed have certainly done that by increasing the money supply. Can you imagine the distortions in the economy caused by the Fed by this massive money printing?

 

According to ABCT, if you print money those sectors where the money goes  will boom, stop printing and those sectors will crash. Fed printing tends to find its way to Wall Street and other capital goods sectors first, thus it is no surprise to Austrian school economists that the crashes are most dramatic in these sectors, such as the stock market and real estate sectors. The economist Murray Rothbard in his book America’s Great Depression [4] went into painstaking detail outlining how the changes in money supply growth resulted in the Great Depression.

 

On a more personal level, as the recent crisis was developing here, I warned throughout the summer of 2008 of the impending crisis. On July 11, 2008 at EconomicPolicyJournal.com, I wrote:

 

SUPER ALERT: Dramatic Slowdown In Money Supply Growth

 

After growing at near double digit rates for months, money growth has slowed dramatically. Annualized money growth over the last 3 months is only 5.2%. Over the last two months, there has been zero growth in the M2NSA money measure.

 

This is something that must be watched carefully. If such a dramatic slowdown continues, a severe recession is inevitable.

 

We have never seen such a dramatic change in money supply growth from a double digit climb to 5% growth. Does Bernanke have any clue as to what the hell he is doing?

 

On July 20, 2008, I wrote:

 

I have previously noted that over the last two months money supply has been collapsing. M2NSA has gone from double digit growth to nearly zero growth.

 

A review of the credit situation appears worse. According to recent Fed data, for the 13 weeks ended June 25, bank credit (securities and loans) contracted at an annual rate of 7.9%.

 

There has been a minor blip up since June 25 in both credit growth and M2NSA, but the growth rates remain extremely slow.

 

If a dramatic turnaround in these numbers doesn't happen within the next few weeks, we are going to have to warn of a possible Great Depression style downturn.

 

Yet, just weeks before these warnings from me, Chairman Bernanke, while the money supply growth was crashing, had a decidedly much more optimistic outlook, In a speech on June 9, 2008, At the Federal Reserve Bank of Boston’s 53rd Annual Economic Conference [7], he said:

 

I would like to provide a brief update on the outlook for the economy and policy, beginning with the prospects for growth.  Despite the unwelcome rise in the unemployment rate that was reported last week, the recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly.  Indeed, although activity during the current quarter is likely to be weak, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.  Over the remainder of 2008, the effects of monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets, and still-solid demand from abroad should provide some offset to the headwinds that still face the economy.

 

I believe the Great Recession that followed is still fresh enough in our minds so it is not necessary to recount in detail as to whose forecast, mine or the chairman’s, was more accurate.

 

I am also confused by many other policy making steps here at the Federal Reserve. There have been more changes in monetary policy direction during the Bernanke era then at any other time in the modern era of the Fed. Not under Arthur Burns, not under G. William Miller, not under Paul Volcker, not under Alan Greenspan  have there been so many dramatically shifting Fed monetary policy moves. Under Chairman Bernanke there have been significant changes in direction of the money supply growth FIVE different times. Thus, for me, I am not at all surprised at the current stop and go economy. The current erratic monetary policy makes it exceedingly difficult for businessmen to make any long term plans.  Indeed, in my own Daily Alert on the economy [8] I find it extremely difficult to give long term advice, when in short periods I have seen three month annualized M2 money growth go from near 20% to near zero, and then in another period see it go from 25% to 6%.

 

I am also confused by many of the monetary programs instituted by Chairman Bernanke. For example, Operation Twist.

 

This is not the first time an Operation Twist was tried. an Operation Twist was tried in 1961, at the start of the Kennedy Administration [10] A paper [11] was written by three Federal Reserve economists in 2004 that, in part, examined the 1960's Operation Twist

 

Their conclusion (My bold):

 

A second well-known historical episode involving the attempted manipulation of the term structure was so-called Operation Twist.  Launched in early 1961 by the incoming Kennedy Administration, Operation Twist was intended to raise short-term rates (thereby promoting capital inflows and supporting the dollar) while lowering, or at least not raising, long-term rates. (Modigliani and Sutch 1966).... The two main actions of Operation Twist were the use of Federal Reserve open market operations and Treasury debt management operations..Operation Twist is widely viewed today as having been a failure, largely due to classic work by  Modigliani and Sutch....

 

However, Modigliani and Sutch also noted that Operation Twist was a relatively small operation, and, indeed, that over a slightly longer period the maturity of outstanding government debt rose significantly, rather than falling...Thus, Operation Twist does not seem to provide strong evidence in either direction as to the possible effects of changes in the composition of the central bank’s balance sheet...

 

We believe that our findings go some way to refuting the strong hypothesis that nonstandard policy actions, including quantitative easing and targeted asset purchases, cannot be successful in a modern industrial economy.  However, the effects of such policies remain quantitatively quite uncertain.

 

One of the authors of this 2004 paper was Federal Reserve Chairman Bernanke. Thus, I have to ask, what the hell is Chairman Bernanke doing implementing such a program, since it is his paper that states it was a failure according to Modigliani, and his paper implies that a larger test would be required to determine true performance.

 

I ask, is the Chairman using the United States economy as a lab with Americans as the lab rats to test his intellectual curiosity about such things as Operation Twist?

 

Further, I am very confused by the response of Chairman Bernanke to questioning by Congressman Ron Paul. To a seemingly near off the cuff question by Congressman Paul on Federal Reserve money provided to the Watergate burglars, Chairman Bernanke contacted the Inspector General’s Office of the Federal Reserve and requested an investigation [12]. Yet, the congressman has regularly asked about the gold certificates held by the Federal Reserve [13] and whether the gold at Fort Knox backing up the certificates will be audited. Yet there have been no requests by the Chairman  to the Treasury for an audit of the gold.This I find very odd. The Chairman calls for a major investigation of what can only be an historical point of interest but fails to seek out any confirmation on a point that would be of vital interest to many present day Americans.

 

In this very building, deep in the underground vaults, sits billions of dollars of gold, held by the Federal Reserve  for foreign governments. The Federal Reserve gives regular tours of these vaults, even to school children. [14] Yet, America’s gold is off limits to seemingly everyone and has never been properly audited. Doesn’t that seem odd to you? If nothing else, does anyone at the Fed know the quality and fineness of the gold at Fort Knox?

 

In conclusion, it is my belief  that from start to finish  the Fed is a failure. I believe faulty methodology is used, I believe that  the justification for the Fed, to bring price and economic stability, has never been a success. I repeat, prices since the start of the Fed have climbed by 2,241% and there have been over the same period 18 recessions. No one seems to care at the Fed about the gold supposedly backing up the gold certificates on the Fed balance sheet. The emperor has no clothes.  Austrian Business cycle theorists are regularly ignored by the Fed, yet they have the best records with regard to spotting overall downturns, and further they specifically recognized the developing housing bubble. Let it not be forgotten that in 2004, two economists here at the New York Fed wrote a paper [15] denying there was a housing bubble. I responded to the paper [16] and wrote:

 

The faulty analysis by [these] Federal Reserve economists... may go down in financial history as the greatest forecasting error since Irving Fisher declared in 1929, just prior to the stock market crash, that stocks prices looked to be at a permanently high plateau.

 

Data released just yesterday, now show housing prices have crashed to  2002 levels.

 

I will now give you more warnings about the economy.

 

The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.

 

Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat.

 

Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.

 

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Fri, 04/27/2012 - 17:24 | 2381189 NotApplicable
NotApplicable's picture

Funny, I just mentioned that up thread. Clinton fucking ruled those events. Got me to laughing so hard, at times I momentarily forgot he was a criminally-insane mass-murderer.

Fri, 04/27/2012 - 16:40 | 2381085 Richard Head
Richard Head's picture

Terrorist.  Standby for extraordinary rendition.

Fri, 04/27/2012 - 16:40 | 2381086 tu-ne-cede-malis
tu-ne-cede-malis's picture

The biggest takeaway from the speech and the Q&A that followed is the fact that all these economics know one thing: Keynesianism.  They genuinely believe this is the only credibile theory out there.  History will show this as probably one of mankind's greatest blunders.

Fri, 04/27/2012 - 16:40 | 2381087 Jack Sheet
Jack Sheet's picture

apologies for OT but does anyone know of an adblocker app that works for the ipad? I am sick to death at having to stare at Warren Fucking Buffett's face in the banner commercial right at the top of the ZH front page.

Fri, 04/27/2012 - 17:05 | 2381135 pods
pods's picture

Just Google "Sugar Daddy dating" and "Brazillian Brides" a couple of times and the ads should change.

pods

Fri, 04/27/2012 - 17:12 | 2381155 Jack Sheet
Jack Sheet's picture

Thanks! sounds promising. These ads are a fucking pestilence

Fri, 04/27/2012 - 19:15 | 2381385 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Wait 'til you see the Sugar Daddy Dating ads...

I had no idea that once I finally make it to the status of "Established Gentleman" that my tastes are apparently going to revert to the same as a 17-year-old-white-wannabe-hip-hop gangsta!

But hey, who am I to argue with demographics and marketeers?

Fri, 04/27/2012 - 17:42 | 2381211 fnordfnordfnord
fnordfnordfnord's picture

Naw but I can endorse Pods' technique. I doubt anyone could be disappointed with the red-headed Snorg Tees girl. At least not the banner ad that features her.

Fri, 04/27/2012 - 20:21 | 2381467 lotsoffun
lotsoffun's picture

jackie boy - but now that you're a big strapping lad and you know there is no santa claus, or ronald mcdonald, don't you feel safer knowing that good ole home boy uncle warren can help make your rich?  he's a nice old guy - and he has ONLY YOUR best interests foremost in his mind.  smart guy.  he's the guy that has the lizard to convince you to buy insurance from him.  i ALWAYS take good advice from lizards.  talking lizard introduced me to my wife.

 

Fri, 04/27/2012 - 16:41 | 2381088 blunderdog
blunderdog's picture

I'm sure that'll cause them to mend their ways.

Fri, 04/27/2012 - 16:41 | 2381089 Bansters-in-my-...
Bansters-in-my- feces's picture

It is too bad he died such a young man....

Brave young man he was though.

Fri, 04/27/2012 - 16:42 | 2381092 fnordfnordfnord
fnordfnordfnord's picture

I think he just called them all rats!

Fri, 04/27/2012 - 16:43 | 2381094 Hannibal
Hannibal's picture

END THE FED AND EXPOSE THE FRAUDS!

Fri, 04/27/2012 - 17:08 | 2381144 LawsofPhysics
LawsofPhysics's picture

How about PROSECUTE THE FUCKING FRAUD AND THEN EXECUTE THE FED.

Fri, 04/27/2012 - 21:14 | 2381548 Captain Benny
Captain Benny's picture

How about EXECUTE THE TWO LEGGED RATS.  THEN TAKE THEIR GOLDEN CHEESE AND DISTRIBUTE IT TO THE PEOPLE IT WAS STOLEN FROM THROUGH TAXATION, INFLATION, AND EXTORTION.

 

Supposedly the govt just ordered a 140Million rounds of ammo, thats enough to shoot each banker in the toes and fingers, painfully suffering as we work the rounds inward toward more vital places.

Fri, 04/27/2012 - 16:43 | 2381095 TideFighter
TideFighter's picture

"Tower to Jet Blue Captian, you're scaring the passengers." 

Fri, 04/27/2012 - 16:43 | 2381096 gamera9
gamera9's picture

This is right up CNBC's programming alley can't believe ZH scooped it first.

Fri, 04/27/2012 - 16:43 | 2381097 gamera9
gamera9's picture

This is right up CNBC's programming alley can't believe ZH scooped it first.

Fri, 04/27/2012 - 16:48 | 2381103 Eric L. Prentis
Eric L. Prentis's picture

When truth and beauty confronts privilege and power:

 

“First they ignore you, then they laugh at you, then they fight you, then you win.”Mohandas Gandhi.

Fri, 04/27/2012 - 16:48 | 2381104 Cursive
Cursive's picture

Dear Robert Wenzel,

Welcome to Fight Club. If you need a place to stay (after the beatdown coming your way) look me up.

Cursive

Fri, 04/27/2012 - 16:52 | 2381110 Crawdaddy
Crawdaddy's picture

The priesthood? Hallowed walls. I've heard this somewhere before.

http://www.youtube.com/watch?feature=player_detailpage&v=xwUjzyM0p9U#t=640s

Our great computers, fill these hallowed walls!

And the meek shall inherit the Earth. Bitchez.

Fri, 04/27/2012 - 16:58 | 2381120 mayhem_korner
mayhem_korner's picture

 

 

We have assumed control...we have assumed control...we have assumed control.  [fade Lifeson]

Fri, 04/27/2012 - 17:15 | 2381165 Crawdaddy
Crawdaddy's picture

I stumbled on this clip a while back and it struck me the Temple of Syrinx is a great analogy to the Fed.

Fri, 04/27/2012 - 17:17 | 2381170 dexter_morgan
dexter_morgan's picture

+2112

Fri, 04/27/2012 - 21:17 | 2381552 logicalman
logicalman's picture

The meek don't want it.

Fri, 04/27/2012 - 16:52 | 2381111 Village Smithy
Village Smithy's picture

The board probably listened to his first couple of statements and then went back to daydreaming about what cigars they would purchase on the way home to take to the country club in the morning. They don't give a shit because they feel no hardship.

Fri, 04/27/2012 - 17:20 | 2381179 Tenshin Headache
Tenshin Headache's picture

He is far from a compelling speaker and I suspect most in the audience were drawn to daydreaming within a few paragraphs.  If this message is to land on any ear drums, we need better speakers than this guy. He is a little too easy to trivialize.

Fri, 04/27/2012 - 16:53 | 2381113 Whoa Dammit
Whoa Dammit's picture

Well someone won't be invited back.

 

Fri, 04/27/2012 - 17:03 | 2381128 Benjamin Glutton
Benjamin Glutton's picture

Founding document of The Wenzel Institute of Central Banking.

 

 

Fri, 04/27/2012 - 17:07 | 2381136 pvzh
pvzh's picture

I am not sure what all that mean? Why was he invited to speak? They (Fed) knew what he was going to say? Is the jig truely up, so it is OK now to let everybody know. Or is it glitch in the matrix?

Sat, 04/28/2012 - 01:58 | 2381813 Barefooted_Tramp
Barefooted_Tramp's picture

...what is a court without a jester?

Fri, 04/27/2012 - 17:06 | 2381138 dexter_morgan
dexter_morgan's picture

Watch your back, Mr. Wenzel - awesome speech though.

Fri, 04/27/2012 - 17:13 | 2381157 LMAOLORI
LMAOLORI's picture

I have been following Wenzel for years glad to see this posted here!

 

 

Fri, 04/27/2012 - 17:20 | 2381180 gaoptimize
gaoptimize's picture

Please Facebook, Google+, or otherwise link Robert Wenkle's speech as widely as possible to awaken more sheep.

I am putting together a "Heros of the American Economic Renaissace" collection for my son and myself.  I'm adding this to it, along with Jim Grant's talk ( http://www.zerohedge.com/news/must-read-jim-grant-crucifies-fed-explains-why-gold-standard-best-option ).  I hope to add Ron Paul's prime-time speach at the Republican convention in Tampa to this in August. 

Fri, 04/27/2012 - 17:23 | 2381188 Fix It Again Timmy
Fix It Again Timmy's picture

Quick, start him on a megadose of Delusionol via IV then wheel him into the operating room so he can be re-grooved.  We must act quickly before we lose him!.......

Fri, 04/27/2012 - 17:26 | 2381193 FutureShock
FutureShock's picture

Do you guys understand what he means when he says leave this place to the moths etc?  It means we do not need the Fed. We should print our own money with no interest debt just like colonial america. Ron Paul knows, the media does not and Washington does not. Fed is Private and making money on interest and ponzi fractional reserve that must end for us to stop the madness.

 

http://www.save-a-patriot.org/files/view/whofed.html

This is who owns the fed

Fri, 04/27/2012 - 17:32 | 2381196 loveyajimbo
loveyajimbo's picture

In a fascist state, most know that the systems are corrupt and rigged, but are unable do do a damn thing about it, short of rebellion... the candidates are picked, tha parties have long ago merged, the corruption of the ruling corporations went all the way to the Supreme Court... As Ron Paul so eloquently phrased it:  "We be fucked."

Sat, 04/28/2012 - 15:01 | 2382492 matrix2012
matrix2012's picture

"... the candidates are picked, tha parties have long ago merged, the corruption of the ruling corporations went all the way to the Supreme Court... "

 

and members of SUPREME COURT as 'the holy angel guards' are serving LIFETIME :-)

 

TPTB already locked the American system in its entirety!!! Near full-spectrum dominance!

Under their armpits are ClA, NS@, PENTAGUN, CONGRESS, WHITE HOUSE, Supreme Court...and countless other organizations incl. the NGOs/Human-Right Activitsts, MSM, TV stations...  practically all influential organizations are under their control!!!

 

Missed to mention the nearly omnipotent organization ==> CFR:COUNCIL ON FOREIGN RELATIONS

NEAR FULL SPECTRUM DOMINANCE!!

Fri, 04/27/2012 - 17:35 | 2381201 EvryInternational
EvryInternational's picture

That was one of the best speeches I've read that eloquently put the Fed in its place.

Fri, 04/27/2012 - 17:54 | 2381212 blindman
blindman's picture

Guns and Butter
Modern Money theory explained, a presentation by Stephanie Kelton, an associate professor of Economics. Host: Bonnie Faulkner
.
Friday April 27 9:01am
58 min
http://archive.wbai.org/#ankor6
http://wbai.org/index.php?option=com_content&task=view&id=10700&Itemid=141
.
the government has a debt. the central bank has a "balance sheet" - debt.
who has the "money"? that would be the party with the privilege. the one
we all work for , listen to and pray to, or should i say grovel? metal or paper,
groveling is groveling. so it goes..... just don't turn out the lights.
reminder to self: don't forget the ideas concerning the right and left eyes.
reminds me of left hand and right hand, not knowing and all boats sinking in a
rising tide if those boats should happen to be anchored too restrictively ?
unadvantageously?
end the fed !

Fri, 04/27/2012 - 17:45 | 2381213 GCT
GCT's picture

Thanks you ZH! The article and speech was inspiring for me anyway.  Too bad it probably pissed alot of his guests off.  Too bad this speech will never be covered in the evening news.

Mr. Wenzel better watch his back after this speech.  This article made my day!

Fri, 04/27/2012 - 17:51 | 2381225 fnordfnordfnord
fnordfnordfnord's picture

If he keeps this up they might not invite him back.

Fri, 04/27/2012 - 17:59 | 2381240 Tenshin Headache
Tenshin Headache's picture

Before everyone gets too excited over this ...

According to Wenzel himself, he met with a small group of economists who he describes as being part of the "outer ring" at the Fed. Said economists wouldn't even dare to discuss any of Bernanke's policy moves. Who is the "outer ring"? Well, they don't ask questions and they work on models:

"I suspect that at the top of the Fed, there are some very evil types who understand the game is to protect the banksters, but I don't think that is the view held by the outer ring. They have been brought up in the system and they don't ask questions that threaten their pay checks (It was most difficult impossible to get the economists to discuss any of the erratic moves made by Bernanke) and work developing models within the twisted Keynesian model."

That was his audience.

The original invitation for Wenzel to speak was canceled within 15 minutes of its being sent out within the Fed by one of the economists. What was cobbled together sounds more or less impromptu and there is no evidence whatsoever that there were any policy makers in the room.

http://www.economicpolicyjournal.com/2012/04/my-fed-speech-details.html

 

Fri, 04/27/2012 - 18:35 | 2381322 Johnk
Johnk's picture

Trade of the decade: Long guillotines/short Jekyll Island Real Estate

http://www.guillotine.dk/Pages/drawing1792.html

http://jekyll-island.com/

Fri, 04/27/2012 - 18:50 | 2381352 Capt. Ray
Capt. Ray's picture

I don't know, maybe it's just me...

But huhhh, you know... I heard Jim Grant and alike spoke to them aswell.

That made me think... Is the FED crowd sourcing?!

 

...i take the answer of the wire.

Fri, 04/27/2012 - 19:07 | 2381374 BanksterSlayer
BanksterSlayer's picture

Was the "prepared food" over which he did not want to be rude actually a buffet of Monsanto GMO entrees?

Fri, 04/27/2012 - 19:22 | 2381392 SAT 800
SAT 800's picture

Well, that was special.

Fri, 04/27/2012 - 19:27 | 2381396 razorthin
razorthin's picture

The distinction he makes, in speaking to the two-legged variety, of the type of "rat" in the last sentence is priceless.

Fri, 04/27/2012 - 19:31 | 2381399 rlouis
rlouis's picture

And the applause at the end of the speech was the sound of one hand clapping ... deafening.

Fri, 04/27/2012 - 19:34 | 2381403 lakecity55
lakecity55's picture

Hey, wasn't there a Mr Wenzel whose car was found idling last week where all those germ warfare scientists mysteriously disappeared?

Fri, 04/27/2012 - 19:50 | 2381422 monopoly
monopoly's picture

It feels so good to hear the truth. It is like a cleansing for us. We are ridiculed, cursed, called Un American, but then someonw of intelligence, invited to the Fed, speaks for us. What a wonderful way to start the weekend, with the truth being told.

Thank you again, Zero Hedge.

Fri, 04/27/2012 - 20:02 | 2381426 Wakanda
Wakanda's picture

Fucking awesome.

Imagine that, someone speaking truth (directly - in your face) to power.

Fri, 04/27/2012 - 20:19 | 2381465 Peter Pan
Peter Pan's picture

The FED has no real way of reversing out of its destructive path. It therefore prolongs the lies and protects the bankers in the hope that some ground shaking event can take the responsibility for the final collapse. Until then the government will be setting up camps, buying more bullets and completing its surveillance center.

If we survive the unravelling, history will not be kind to the FED or its minions.

Fri, 04/27/2012 - 20:26 | 2381470 exartizo
exartizo's picture

This gentleman is incredulous indeed.

But he fails to understand that:

The Fed is owned by the banks. Most developed world nation governments are owned by the banks. The banks are owned by a very small group of people.

It is the aim of this very small group of people to own as much of this world as they can.

This will primariy be evident in their heretofore relatively unknown but increasing accumulation of gold, silver and, in general commodity assets against the day of the collapse of worldwide fiat currencies.

Of which the first to collapse will be the Euro with the Dollar not too far behind.

The only real enemy of those who own the banks is China.

Why?

Because China is also striving to accumulate as much silver, gold, and commodities around the world as those who own the banks.

Fri, 04/27/2012 - 20:34 | 2381488 Sancho Panza
Sancho Panza's picture

Nice post.  Beat me to the point.

Fri, 04/27/2012 - 20:40 | 2381495 exartizo
exartizo's picture

thanks. :)

cheers my friend.

Fri, 04/27/2012 - 20:30 | 2381479 Sancho Panza
Sancho Panza's picture

Scratch your head no more.  The Fed's Keynesians are merely a hired distraction from the interests of the Rockefellers, Warburgs, Rothschilds, and others.  Fed manipulation in the price and quantity of money is these family's instrument of control over timing of global inflations and deflations.  With control over that timing, the world is theirs.  'nough said.

Free markets indeed.

Fri, 04/27/2012 - 20:45 | 2381504 exartizo
exartizo's picture

Well said.

It is their eventual intent to destroy all world fiat currencies.This plan has been evident for many decades.

They only really gained the upper hand, finally, with the advent and purchase of Richard Nixon.

They believe themselves to be quintessential chess players.

Only China stands in their way.

Fri, 04/27/2012 - 20:43 | 2381501 Money 4 Nothing
Money 4 Nothing's picture

Did the CIA accidently use a truth serum dart instead of a glycerine one?

Sunshine is the best disinfectant.

Fri, 04/27/2012 - 21:08 | 2381539 Apostate2
Apostate2's picture

The man who persuades you to lend him money or goods and then keeps them is without doubt a rogue; but much the greatest rogue of all is the man who has gulled his city into the belief that he is fit to direct it.” - Xen. Mem. 1.7.4

Did they offer him a cup of hemlock..

Fri, 04/27/2012 - 21:10 | 2381542 suckerfishzilla
suckerfishzilla's picture

How did Wenzel get hired at the FED in the first place?   He is really out of place there. 

Fri, 04/27/2012 - 21:11 | 2381545 GlobalCtzn
GlobalCtzn's picture

Where I come from we call that havings BALLS! Kudos to you Mr. Wensel.

Fri, 04/27/2012 - 22:25 | 2381640 Tanks-on-the-streets
Tanks-on-the-streets's picture

I wonder what food he got at the feast. I Imagine he wouldn't be interested in the typical Fed fare of dead babies and virgins blood...

Fri, 04/27/2012 - 22:43 | 2381660 CB
CB's picture

I've been trying to figure out for a long long long long time why ZH hasn't had EPJ on its "Zero Hedge READS" list of links. RW's a frickin excellent econ writer.

Fri, 04/27/2012 - 23:06 | 2381685 1C3-N1N3
1C3-N1N3's picture

Not only yes, but HELL YES!

Way to give 'em hell, Bob!

The Bernank's printing press will never outpace my love for ZH. Never. That is assured. 

Fri, 04/27/2012 - 23:19 | 2381698 BlackholeDivestment
BlackholeDivestment's picture

...I would say ''slam dunk'', but, George Tenet ruined that line. 

Is there any doubt that these lairs have a goal that requires them to lie? The fact is, the truely delusional fools would give grace to these evil bastards by saying they are just stupid. Anyone watching these assholes knows exactly what they are doing, which is; causing a crisis to acheive a global market system controlled through debt in order to establish market command over all nations, and, to establish a military police force position in order to secure this new global order ...at the expense of national sovereignty and human independence, freedom, liberty and justice for all. 

If you are not actively at war against the bastards, in word and by divesting, the black hole is aaaah waiting. ''Trade the market at hand'' does not cut it, that is accepting the mark of the beast. The price of the penalty for being an evil ass is defined by the price paid by everyone else, who suffers the mark of (Chairsatan) contempt and the seal of the coming destruction and death first. That is the image of the beast, as an equal, subject to the rule of the law set in judgment without the call for mercy. Judgment shall come upon the Whore of Babylon. History has already proven the case, the Truth is not a choice. Delusional fools do not accept the Truth, which is so perfectly defined by Mr. Wenzel in this speech. The love of and for the Truth, he has offered in this speech, is a great revelation of the spirit of the law of mercy. I agree with Robert and have no doubt, the Truth confirmed him in principle, if not in Spirit.

 http://www.biblegateway.com/passage/?search=Mark%208:%2035-38&version=ESV;KJV

Fri, 04/27/2012 - 23:51 | 2381731 gwar5
gwar5's picture

Can't stop myself from re-reading Wenzel's brilliant speech. Truly economic porn, and conspiracy theory tin-foil hatter triumphalism over the economic PhD frauds. Common sense won, Keynesians lost.  Where's Nuriel Roubini?

I presume from now on there will be no more Nobel Prizes in Economics going to a Neo-Keynesian, unless, of course, they also start giving the Peace Prizes to Norwegian mass murderers. I will scratch my head. 

It just doesn't get any better: "Leave the FRBNY to the spiders, moths... and to the four-legged rats."


 

Sat, 04/28/2012 - 01:10 | 2381776 waterwitch
waterwitch's picture

Queue the rat with the head of the Bernank in 3...2...1

Sat, 04/28/2012 - 01:19 | 2381789 laosuwan
laosuwan's picture

It's always good to remember when a guest insults their host that some people had the misfortune to be raised by hippies

Sat, 04/28/2012 - 02:13 | 2381817 TwoShortPlanks
TwoShortPlanks's picture

What the fuck is Wenzel talking about? The Fed has been THE MOST successful Central Bank ever put together. It has successfully 'Blood-Let' the entire global economy while skirting economic abyss for near-on a century. The Fed has been THE MOST successful device for lining ultra wealthy pockets and has done so completely hidden from the average citizen.
Again...I ask, what the fuck is Wenzel talking about?

If Wenzel really wanted to tell the truth and forecast the future, he'd be talking about ropes, trees and beheadings.

Sat, 04/28/2012 - 03:51 | 2381854 Peter Pan
Peter Pan's picture

This cannot happen until the politicians, the military, the police and their personal minders turn on them. And that won't happen while their consciences are well paid for.

Sat, 04/28/2012 - 08:20 | 2381986 P-K4
P-K4's picture

One of the best, if not the best all-time article I have read on ZH. 

I amazed that this guy would even be invited to give a speech at the Fed, let alone in NY. With all the vetting going on, it's not like they didn't know Mr. Wenzel's views beforehand.

The question you may have to ask yourself, is the Fed on its way out to only to be absorbed as part of the BIS, or merged with the ECB to form a new organization called the "Sentry Of Bankers" or S.O.B.'s for short.

 

Sat, 04/28/2012 - 10:16 | 2382109 coltek
coltek's picture

In 1963 apparently JFK signed an executive order to end the Fed....

 

....He was soon dead.

 

http://www.john-f-kennedy.net/executiveorder11110.htm

 

"In 1963, President John Kennedy wanted an end to the Federal Reserve System, which had a strangle-hold on the United States and virtually the world. By a simple stroke of the pen, President Kennedy dismissed the Federal Resene System and ordered the U.S. governmcnt to restore its Constitutional-mandate of controlling the money. President Kennedy was dead three weeks later. When President Lyndon Johnson took office, he immediately rescinded Kennedy's order and the Federal Reserve won another round."

 

http://dmc.members.sonic.net/sentinel/naij2.html

Sat, 04/28/2012 - 12:52 | 2382345 I_am_a_foreigner
I_am_a_foreigner's picture

"...Let’s lock the doors and leave the building to the spiders, moths and four-legged rats."

....instead of the two-legged rats who now occupy this building!


Sat, 04/28/2012 - 14:24 | 2382460 paso24
paso24's picture

What a speech, what courage....well done sir. 

Sat, 04/28/2012 - 14:24 | 2382461 paso24
paso24's picture

What a speech, what courage....well done sir. 

Sat, 04/28/2012 - 15:51 | 2382569 GregGH
GregGH's picture

I appologize if this is a duplicate ....  I went to Robert Wenzel's web site and say that someone had done an AUDIO of his speech .... OMG ,.....

 

http://www.sectorfej.net/files/audio/2012-04-25%20Robert%20Wenzel%20NY%2...

 

I am humbled at such greatness ....

Long time lurker .... Greg

Sat, 04/28/2012 - 22:10 | 2383001 MeelionDollerBogus
MeelionDollerBogus's picture

3 MDB comments on the same article?

And how many replying back? Is this a question of extra-tasty troll-feed coming down the conveyor?

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