So Much For The Republic: Plosser Admits Fed Is Now In The "Fiscal Policy" Business

Tyler Durden's picture

Philly Fed dissenter and rebel Charles Plosser, said something stunning during a Q&A session at the Zell/Lurie Real Estate Center at Wharton. When asked what he thought of Operation Twist, his response: "it is fiscal, not monetary policy, and does not have much credibility ....Treasury debt issuance could undo much of the effect of the Fed's attempt to lower borrowing costs, known as 'Operation Twist', Plosser said. "It doesn't have a whole lot of credibility attached to it." While we have no doubt that Twist has no credibility and both the Fed and the market will figure this weakest link out within a month, forcing the Fed to proceed, over the 3 dissenters pseudo-dead bodies, with much more LSAP, it is somewhat shocking to hear confirmation that the Fed itself now sees its duties as those of the legislative, or the body tasked with writing America's laws and funding required amounts of money via debt issuance. Granted, it is well known that America's congress is now in a state of perpetual impasse with no further stimulus likely to come as long as the GOP controls the Congress and Obama is president. But at least the American people (deserving as they are of their representatives and president) pick those in congress. The last time we checked, the "popular election" of the Fed chairman is not in the purvey of the US constitution, and the only capacity given to public representatives is to veto his nomination. Everything else is decided in a banker-filled conclave. Which then begs the question: has the Fed admitted the archaic concept of the US republic is now over and done with?

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Ganja Jane's picture

It's been over and done with for a while; now 'they're' just rubbing our faces in it.

gojam's picture

I thought we all lived in Oligarchies in the West ?

Ganja Jane's picture

"..and to the corporations for which it stands..."

tickhound's picture

" nation, under skynet..."

Ganja Jane's picture

" ...with RFID chips and brown shirts for all."

spiral_eyes's picture

America has two choices right now: default & default by debasement.

If the fiscal side wants to keep up the pretense, the monetary side will just print to hell. It's in their nature. Austerity = Less demand.

The REAL choice is a system of money not based on debt.

But with donkeys (Bernanke) and carnivores (Blankfein) like these, I don't hold out much hope.

Manthong's picture

OK, I give up.

That Russell Napier guy said it: “one must do precisely what everyone else does.”

I’m closing all my puts now and it’s nothing but SPY calls for me from now on.

MillionDollarBonus_'s picture

This is totally irresponsible. The Federal Reserve is there to conduct MONETARY policy only, not fiscal policy. Fiscal stimulus programs should be passed by congress or via executive order by the president. I thought America had better standards of decency than this.

ATM's picture

The POTUS is not supposed to have any fiscal policy powers. Those are supposed to be reserved to Congress but we get executive orders, executive killings, the unitary executive and a private Federal Reserve bank now performing fiscal policy.

Since the Supreme Law of the Land is now null and void does that also mean that we can now go about the hanging of these fuckers from street posts en masse? 

AldousHuxley's picture

POTUS has much higher job approval rating than Congress. Senators from small backward states are the worst. They want to preserve their backwardness at all costs.


But we are talking about mafia henchmen versus the don. They are all shysters who are bought and paid for by their overlords.

zorba THE GREEK's picture

Huxley, I think your comments about us small backward states are unfair

and so does my sister/wife.

jeff montanye's picture

and for someone as prescient or at least paying attention as tyler d. :

UBIGDummy's picture

Bravo,  A non satiracal sarcastic and intelligent remark,  Must have been hard.  Greenie 4 u

CIABS's picture

Manthong: looks like you might have picked the top.

Manthong's picture

I was kind of hoping a public proclamation of capitulation would help things along.  

At least the SPY P104's I picked up at 1:00 pm are green. 

MarketTruth's picture

We're all living in Amerika
Amerika ist wunderbar
We're all living in Amerika
Amerika ist wunderbar

Wenn getanzt wird will ich führen
(Where there's dancing, I want to lead)
Auch wenn ihr euch alleine dreht
(Even if you turn [dance] alone,)
Lasst euch ein wenig kontrollieren
(Let yourself be controlled a little)
Ich zeige euch wie's richtig geht
(I show you how it's done right)

Wir bilden einen lieben Reigen
(We're lining up nicely)
Die Freiheit spielt auf allen Geigen
(Freedom plays on all violins)
Musik kommt aus dem Weißen Haus
(Music comes from the White House)
Und vor Paris steht Mickey Maus
(And before Paris stands Mickey Maus)
(We're all living in Amerika)

This is not a love song
This is not a love song
---> I don't sing my (mother's) tongue
No, this is not a love song

We're all living in Amerika
Coca-Cola, sometimes war
We're all living in Amerika

pods's picture

Love it!  I only wish I could go play pinball on the moon with those guys!


JayParamedic's picture

Great, just I've gotta listen to that whole album. Thanks.

prains's picture

I thought we all lived in Oligarchies in the West ?



Oligarkistan is the place i believe you are mentioning

jarboejl's picture

HAHAHAHAHA!!! Just heard the idiot on Fox Business state, "From Last Monday to today, the Dow Jones is up 1000 points, and that's the greatest gain in seven trading days in nearly three years!"

Okay, this proves that these people simply parrot what they're told to say. Hmmmm...what happen almost 3 years ago...this is a tough one!!! OH YEAH, THE FINANCIAL MARKETS WERE IMPLODING!!! 

The only difference this time is that the financial cheerleaders, uh I mean "media", isn't going to make the same mistake of letting the silly little public know how bad it is this time around.

buzzsaw99's picture

next it will be we haven't seen bullish action like this since the 1930s.


topcallingtroll's picture

Well.....that run after the first crash was pretty good, before it went kerplop.

firstdivision's picture

Need shirts that say, "Banks got $2T and all I got was a lousy 600 points".

DB Cooper's picture

How about "... and all I got was this lousy t-shirt."

tickhound's picture

Nominally even for the year... and for the decade.

Cramer releases new book... "How to get back to even III"

topcallingtroll's picture

Who cares if it is good or bad?
EWZ is up about nine percent from where i got in a couple of weeks ago and as usual i announce my trades at the time of the trade ( 53.74 or 73...hey I was stoned give me a break).

It should hit 70 before the year is out.
Santa is coming early!

AldousHuxley's picture

don't get too excited. what you are seeing is just inflation thanks to UK QE3.


remember QE is just to save banksters' asses from their mistakes of not doing their risk analysis job properly and getting out of bankruptcy.

kito's picture

im buying DOG and SH hand over fist as this market rises

HelluvaEngineer's picture

Might want to throw in some IT (Gartner Inc.) to balance out that portfolio.


kito's picture

there is nothing balanced about the market, nothing i need to balance....

HelluvaEngineer's picture

Christ.  DOG.SH.IT.  Tough crowd.

kito's picture

very nice...wayyyyy over my head

AldousHuxley's picture

Shit ain't free no more....literally. FAKE Dog shit costs $8 + shipping + tax these days.

zorba THE GREEK's picture

Real dog shit is free. You can take all you want from my front lawn,

and I don't even have a dog.

twotraps's picture

agree, its not a great low, but without much interest under 42.75 don't need to risk much to know you are wrong.  This thing trades like shit anyway, what the hell am I talkin about?  Maybe some options as well, upside calls don't seem to rich, if there is some extreme lockdown situation, you wont be able to trade it outright anyway!

SheepDog-One's picture

WOW yea and its so normal having markets swing + - 10% in a few days! Real stable lookin! 

Lindsay Williams warned we'd be seeing this in the fall in a speech last Feb., right before the big rug pull-out.

kito's picture

load up sheepie, keep the whiskey and bourbon comin.........

Hondo's picture

The time is getting closer

BrocilyBeef's picture

Sounds like we need to End the Fed.

When your patient has a tumor, you don't fix the tumor, you cut it out.

Deadpool's picture

no, the new normal is you pay it's hospital bills, pump it with steroids, support it's family, put it's kids thru college, replace his heart and liver, give the nurses a raise, tax the doctor and medical device maker and when he dies blame Bush.

MrBinkeyWhat's picture

2 good!  Personally I am blaming everybody. Ctrl/Sarc

Cynical Sidney's picture

the FED is telling congress that the richest 1% of fat cats gotta pay up

Ganja Jane's picture

I am sorry but I strongly disagree: FUCK. THAT. SHIT. Everyone should STOP paying their taxes. STOP FUNDING THIS SHIT!

Cynical Sidney's picture

the FED is demanding fiscal responsibility, what you suggest isn't sound fiscal policy, is it?

Ganja Jane's picture

It worked for what? 130 years? Andrew Jackson?