Did Janet Yellen Just Recommend Buying Bitcoin

Janet Yellen's last semi-annual testimony before Congress as Fed Chair has just concluded, and as usual it was filled with long-winded platitudes, which were enough to make the blood of anyone actually listening to her slow-motion drawl, come to a boil.

For one, Yellen's hypocrisy hit bitcoinian levels when she had the temerity to say that she is “very disturbed” about the trend toward rising inequality, noting that the central bank only has a “blunt tool” that can’t be used to target certain groups. She's right: the "blunt tool", also known as a money printer, is can - and has - been repeatedly used to target a certain group: the ultra wealthy, i.e., the 0.1%, those who as Credit Suisse showed two weeks ago, have never been wealthier.

 

And just to make sure all your blood has boiled over, Yellen added that the Fed is very focused on “very disturbing long-term trends” in inequality adding that "our own focus"” is on taking those trends and studying them... and making them bigger than ever she should have also added.

Demonstrating her extensive skills of pointing out the obvious, Yellen also said that “we’re suffering from slow productivity growth,” and there should be a focus on how that can be improved. It appears that the Fed is unaware that most employees spend several hours a day on Facebook, LinkedIn and SnapChat; it also appears that the Fed is unaware that most employers are aware of this, and is why there has been so little wage growth to "reward" this collapse in productivity.

Yellen had some advice: Congress and Trump administration “have a much wider set of tools” to address these urgent issues, which are “squarely in Congress’s court.” That would have been a more useful handoff about 9 years ago, which Bernanke could have made the same point instead of unleashing what has become a $15 trillion liquidity injecting between the world's central banks.

If that wasn't enough, Yellen's hypocrisy then veered off into a tangent when she said that the central bank is concerned with "growth getting out of hand" and is committed to continuing to raise rates in a gradual manner. "We don't want to cause a boom-bust condition in the economy," Yellen told Congress.

While Yellen did not specifically commit to a December rate hike, her comments indicated that her views have not changed with her desire for the central bank to continue normalizing policy after years of historically high accommodation.

"We are not seeing undue inflationary pressure in the labor market, so our policy remains accommodative," Yellen said. "But we do think it's important to gradually move our policy rate toward what I'll call a neutral level, which would be consistent with sustainably strong labor market conditions," she said.

Yellen said the Fed does not want to stifle growth but feels strongly about keeping consistent with a labor market that is nearing full employment. "We want to do this gradually, because if we allow the economy to overheat, we could be faced with a situation where we might have to ... raise rates and throw the economy into recession," she said. "We don't want to cause a boom-bust condition in the economy."

But the punchline was when Yellen said she is also, drumroll, "concerned over the surging level of public debt."

Yellen's timely "concern" finally emerged as Congress is debating the passage of a tax cut bill which will cost around $1.5 trillion in new debt, and comes at a time when the CBO is already projecting a deficit of more than $1 trillion in the years ahead and with the total debt level at $20.6 trillion and rising.  Yellen was asked about a proposal that would trigger tax hikes if economic goals are not met. Yellen did not specifically comment on the trigger plan but said Congress is right to be thinking about the future of the national debt.

"I would simply say that I am very worried about the sustainability of the U.S. debt trajectory," Yellen said. "Our current debt-to-GDP ratio of about 75 percent is not frightening but it's also not low."

"It's the type of thing that should keep people awake at night," she added.

So let us get this straight: after nearly a decade of keeping rates at record low levels and directly monetizing all the deficit for Obama's administration, Yellen is suddenly worried about the $20+ trillion in debt it has left the country with?

Apparently so. As even CNBC concedes, "the Fed has critics of its own, though, who say that the central bank helped balloon the debt through low interest rates kept in place since the financial crisis. The Fed kept its benchmark rate anchored near-zero for seven years, from December 2008 through December 2015. During that time, the national debt grew 77 percent."

Incidentally, Yellen is referring to the following CBO forecast, which sees US federal debt rising to levels last seen around the time of World War II:

Which also begs the question: fine, people are finally being "kept up at night" over something we, and others, have long said is a catastrophe for the US (except of course for those occasional econo-idiots known as the Magic Money Tree fanatics, or MMTers). So what is the alternative? If Yellen is right and the endgame is a collapse in the US economy, it means the days of the dollar as a reserve currency are numbered, incidentally something else not just we, but Deutsche Bank has also said previously. Recall what DB's Jim Reid warned in September:

Global central banks have facilitated these elevated asset prices. A long series of global financial problems have now been passed through all parts of the financial system with most of these problems stacked up and now resting with central banks and Governments. The buildup of debt that this has created has forced central banks to keep yields at ultra-low levels, thus raising the prices of a variety of other global assets.

 

We think the final break with precious metal currency systems from the early 1970s (after centuries of adhering to such regimes) and to a fiat currency world has encouraged budget deficits, rising debts, huge credit creation, ultra loose monetary policy, global build-up of imbalances, financial deregulation and more unstable markets.

And if that is indeed the case, it would suggest that Yellen is indirectly - and directly - recommending that her audience buy bitcoin, because it is not just the US which finds itself in a fiscal and monetary dead end, it is every other fiat economy (something DB's Jim Reid warned about two months ago). As a result, the only viable monetary system in a world in which even central banks now warn the debt is "too damn high", is one in which central banks themselves are disintermediated, i .e.  a world in which cryptocurrencies rule.

Which, in retrospect, is not a surprise: back in July we got an amusing, if very vivid harbinger, of what may be coming.

With bitcoin now roughly 4 times higher at $11,000 and rising exponentially, those who did as the above photo suggested, can probably retire....

Comments

E.F. Mutton Wed, 11/29/2017 - 13:02 Permalink

A better question: Why do we always have to parse her fucking words through a transmogrifier?Don't any of these cunts ever use definitive speech?  Might as well read entrails.

GUS100CORRINA MonetaryApostate Wed, 11/29/2017 - 13:11 Permalink

Did Janet Yellen Just Recommend Buying Bitcoin"I would simply say that I am very worried about the sustainability of the U.S. debt trajectory. It's the type of thing that should keep people awake at night."My response: REALLY??? YOU DON'T SAY!!! DEBT TRAJECTORY IS NOT SUSTAINABLE???I HAVE BEEN SAYING THIS TO PEOPLE IN MY SPHERE OF INFLUCENCE FOR 7 DAMN YEARS!!!!Their response: DON'T WORRY, BE HAPPY!! IT WILL ALL WORK OUT!!My response: BULLSHIT!!! We have made our bed. Now we and future generations have to lay in it and it stinks!!! 

In reply to by MonetaryApostate

philipat ParticularlySt… Wed, 11/29/2017 - 18:00 Permalink

They have obviously used common core math. According to my calculations, with National Debt already exceeding $20T and GDP of around $17T, that makes for a Debt/GDP ratio of 118% ALREADY. Of course, that doesn't include State and Local debt or consumer and Corporate debt.Seems like the bending of data has become so bad that they are now presenting outright lies, presumably depending on common core to have eliminated the ability of the sheeple to divide 20 by 17?

In reply to by ParticularlySt…

drgizmo GUS100CORRINA Wed, 11/29/2017 - 13:38 Permalink

yeah it is over ... 10 BCT is just killing it now ... but so what here ia what I think ... no longer politics ... there is nothing to do cut tax ...raise tax ..interest rate  does not matter now we beyond point of recovery ... now it is the speed of collapse that is time ...we are out of time ....why here is why >>>>>>> its just math now <<<<<<<<<dollar panic>>>>>> the value to zero <<<<<<<<<>>>>and soon every one will know <<<<<<<then dollar panic >>>> dollar value to Zero<<<<<<and THAT IS THE END <<<<<<< Factors 1. Revenues intake over tme 2. Interst on the debt 3. Inflation 4. Total debt5. GDP 6. % on 10 year Bond 7. Adv % interest rate Over time  I beleive that there are certain math rules that can NOT be violated for any hope of recovery ... 1. when IOD exceeds total revenues ... 2. When % rates (10 year bond) ... are below 5% (time factor) 3. When total national debt exceeds $50T 4. When infation exceeds GDP % growth 5. When Deficits exceed 33% of Revenues 6. When deographics hender rather then help7. When we remove "God's money"  It is just time ..24 months till collapse... for example Boomer starting in (1940s and ending birth years ranging from 1960) started retiring at 10,000 a a day retire ...with all that means ... it started on or about ...lets call it 2007 ...so we have been into it about 10 years now ...I am sort of in the middle it cost the gov... 1/4 Trillion (250 billion) a year cumulative minus the deaths ... so every 4 years ...about trillion so we are about 2.5 trillion down now ...and have about two more years left ...till collapse... then we will be paying out all revenues... in just (boomer retirement) ....every thing else ....must be printed by the Fed or borrowed with bonds  even the Interest on the debt ... get it ... We past the point of no return ... in 2008 ...of course every thing will be fine ..had we be honest and had integrity and ...put the money collected from all Boomers and not spent it ... but we did       

In reply to by GUS100CORRINA

Chupacabra-322 drgizmo Wed, 11/29/2017 - 14:04 Permalink

Fake, manipulated markets, faked economic numbers, the never-ending war on manufactured terror, $60 billion on Homeland Security a year, $70 plus billion on NSA/CIA, a total over $1 trillion on National Security every year, a militarized police, most prisoners on this planet, infinite spying on everyone, 7 Muslim countries being bombed by the Noble Prize Winner, a burgeoning war in Ukraine, toxic GMO foods, fluoridated water, NSA spying on Supreme Court, Congress and White House - the land of the free is fast devolving into a perfect dystopia and Paul Craig Roberts has been warning about this for decades starting with his calling the 9/11 attacks as false-flag.  The cancer is not only financial, it is political, social, ethical and in virtually every aspect of life in the land of the free.

-Paul Craig Roberts.

In reply to by drgizmo

Chupacabra-322 GUS100CORRINA Wed, 11/29/2017 - 14:07 Permalink

Hedgemony is difficult & expensive to keep Centrialized for long periods of time.

Rome comes to mind.

"I know not why any one but a school-boy in his declamation should whine over the Commonwealth of Rome, which grew great only by the misery of the rest of mankind. The Romans, like others, as soon as they grew rich, grew corrupt; and in their corruption sold the lives and freedoms of themselves, and of one another. [...] A people, who while they were poor robbed mankind; and as soon as they became rich, robbed one another."

Samuel Johnson: Review of Thomas Blackwell's "Memoirs of the Court of Augustus"

In reply to by GUS100CORRINA

GreatUncle GUS100CORRINA Wed, 11/29/2017 - 14:59 Permalink

@GUS100CORRINA - You know that old rope around the neck is starting to get very tight when they are finally admitting to the truth.Just a pity Obama did not have his wings clipped, but he played his part on 2,3 & 4, all part of the sequence of events ...1.) 2008 system going down ... oh fuck we in power lose everything.2.) Turn on the printing presses Bernake keep this MOFO economy alive while we sort our financial affairs.3.) 10 year contracts or less kind of define the time line 2018 is next year.4.) Once the plan is in motion we just wait the serfs will be having the debt transferred to them in one form or another.5.) Start raising interest rates now we are all out safe and clear financially.6.) TA-DAH we are at this point in the game they will hang us when they realise so start admitting the truith slowly and gently so they will think "the FED was telling us this". They did not tell you about points 1. - 5. and it took a decade.As for $20T+ Trillion what about all the derivatives shit $300T+ makes $20T look fucking hilarious TBH.2018, next year something will give ... you can put up interest rates in an economy that can stand the pain but forcing them up when the economy cannot stand it will you flash burn the whole lot.In 1929 the wealthiest got crucificed financially, they learned not to let it happen to them again but the serfs get trashed.

In reply to by GUS100CORRINA

Herdee Wed, 11/29/2017 - 13:04 Permalink

The government spent it all on war. Trillions on MiddleEast societies being destryed and for what? Don't blame her. The Fed is now used as a tool for political spending. The whole monetary system now is a bad joke.

GeezerGeek Herdee Wed, 11/29/2017 - 13:28 Permalink

Unfortunately you are wrong. The trillions were not all spent on military wars, which is what I infer you meant. I agree that far too much was spent destroying societies in the Middle East by killing people and breaking things, but if you look at the numbers regarding "the war on poverty" and "the war on drugs" you will see that these "wars" cost more and were quite effective in destroying large portions of the American society.Yes, it is all political spending. But the spending has primarily been done to destroy every person not attached to the globalist/NWO apparatus. They are being far more successful than I like.

In reply to by Herdee

skywalker22 Wed, 11/29/2017 - 13:09 Permalink

With regards to crypto, there is an enormous amount of sources, theories, articles, analogies, studies, anecdotes, and other reasons that can be used to backup its fundamentals. Skeptics just keep talking about tulips...

Iconoclast421 skywalker22 Wed, 11/29/2017 - 13:27 Permalink

It would take something like 20 days to clear just one minute of global financial transactions using bitcoin. Sorry to speak truth to idiocy, but bitcoin is useless, in fact it is more useless than a tulip. At least a tulip looks nice and has a nice smell for a while. Blockchain has potential, but that potential is not and never will be unlocked with bitcoin.

In reply to by skywalker22

Clock Crasher Wed, 11/29/2017 - 13:10 Permalink

I can see it.  Yellen and her pals escaping off the west coast in a hydrofoil watercraft with the pirate flag at full mast blowing in the wind, clutching her bonnet to her head in the breeze as they dash off at full speed.  in the background - a skyline with rising plumes of black smoke rising from the fires they set.  The People street fighting over the last can of Alpo.  We're on our own.  DJT and company are'nt coming to save you.  

GreatUncle Clock Crasher Wed, 11/29/2017 - 15:05 Permalink

Well they fled from Russia, then they fled from Germany, where will they flee to next time?This is the problem now for those with absolute power, you are responsible by the definition of absolute power and exactly where you going to hide when the whole world is now known. It is not like you can go and hide in deepest darkest Africa, Afghanistan, South America is it?Tip for the future, don't do what you been doing and you would have no reason to flee.

In reply to by Clock Crasher

Son of Captain Nemo Son of Captain Nemo Wed, 11/29/2017 - 13:31 Permalink

"With bitcoin now roughly 4 times higher at $11,000 and rising exponentially, those who did as the above photo suggested, can probably retire...."

Or lose it all when the PRC and Russian Federation go into overdrive with the next "dump fest" of more U.S. Ts!!!

Certainly hope this was just an isolated case (http://www.zerohedge.com/news/2017-10-30/could-be-huge-gold-bar-certifi…) and will never happen again given the integrity and vetting process through the assay business just as Mt. Gox and Wanna Cry will never happen again as long as "Satoshi" is our overlord and protector of the crypto space!

In reply to by Son of Captain Nemo

blentus Wed, 11/29/2017 - 13:14 Permalink

I don't follow US news much, so forgive me for stupid question.But what does it mean that she is strongly opposed to audit (of?) FED?Do government agencies/institutions get a say in whether they get audited?