The FED- A ship of fools
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
The FED- A ship of fools
There is a common adage that “book learning” is not the same as “street smarts.” In the case of economics PhDs like Janet Yellen, we could adapt this to say that “theory” is not the same as “reality.”
Janet Yellen is a career academic. This is not necessarily a bad thing. Career academics play a critical role in terms of both research and teaching future generations of leaders.
However, unlike most career academics, Janet Yellen is in charge of the US economy. In this light, one has to ask aloud, “why would you put someone with absolutely zero experience in creating jobs, growing a business, lending money, hiring, firing, etc. in charge of the US economy.”
Has Yellen ever had to personally decide whether or not to expand a business? Has Yellen ever had to develop a marketing campaign to increase sales? Has she ever had to concern herself with employment benefits for her staff?
Let’s take the other component of the Fed’s work, the financial markets, into consideration. Has Yellen ever managed a portfolio of any significant size? Has she ever guided a trading team? Has she ever even run a bank? Has she ever had to unwind a bankrupt institution?
The answer to all of these is no. And yet, we’re supposed to entrust her to guide the economy. This would be like asking someone who has never even run a 5K but has read a lot of books on running to win the New York marathon.
We do not mean to pick on Yellen in particular. Indeed, she is not unique in her total lack of qualifications for the job of Fed Chair.
Bernanke was another career academic with next to no real world experience. We’ve since discovered that ALL of his theories on economics misguided. Indeed it is difficult to find a single economic metric that has improved since 2008 other than household net worth which has largely been driven by gains in the stock market.
1) The labor participation rate is virtually the same.
2) Median incomes have fallen.
3) Real unemployment (not the phony official number) is only marginally better.
4) Costs of living are significantly higher.
And yet, Bernanke spent over $4 trillion trying to prove his misguided theories. It was the single most expensive academic study ever performed. Unfortunately it punished billions of people (the Fed’s inflationary policies lead to record food prices which incited starvation and civil unrest globally).
Not once during the five year period between 2008 and 2013 when he retired, did Bernanke change course. Any normal person would have reconsidered their positions after $1 trillion or $2 trillion didn’t do the trick. The Arab spring, record high food prices, food stamp usage and the like would also have given most folks pause. Not Bernanke. And apparently not Yellen either (she was the Fed’s second in command for most of Bernanke’s tenure).
We all know how this will work out: another, even larger crisis is looming on the horizon. And this time around, the Fed has already used up virtually all of its ammo. When and how it will hit, no one knows. But the fact that a mere 10% drop in stock prices from RECORD HIGHS was enough to induce panic around the globe should tell you all you need to know about the fragility of the financial system.
Janet Yellen is a career academic. This is not necessarily a bad thing. Career academics play a critical role in terms of both research and teaching future generations of leaders.
However, unlike most career academics, Janet Yellen is in charge of the US economy. In this light, one has to ask aloud, “why would you put someone with absolutely zero experience in creating jobs, growing a business, lending money, hiring, firing, etc. in charge of the US economy.”
Has Yellen ever had to personally decide whether or not to expand a business? Has Yellen ever had to develop a marketing campaign to increase sales? Has she ever had to concern herself with employment benefits for her staff?
Let’s take the other component of the Fed’s work, the financial markets, into consideration. Has Yellen ever managed a portfolio of any significant size? Has she ever guided a trading team? Has she ever even run a bank? Has she ever had to unwind a bankrupt institution?
The answer to all of these is no. And yet, we’re supposed to entrust her to guide the economy. This would be like asking someone who has never even run a 5K but has read a lot of books on running to win the New York marathon.
We do not mean to pick on Yellen in particular. Indeed, she is not unique in her total lack of qualifications for the job of Fed Chair.
Bernanke was another career academic with next to no real world experience. We’ve since discovered that ALL of his theories on economics misguided. Indeed it is difficult to find a single economic metric that has improved since 2008 other than household net worth which has largely been driven by gains in the stock market.
1) The labor participation rate is virtually the same.
2) Median incomes have fallen.
3) Real unemployment (not the phony official number) is only marginally better.
4) Costs of living are significantly higher.
And yet, Bernanke spent over $4 trillion trying to prove his misguided theories. It was the single most expensive academic study ever performed. Unfortunately it punished billions of people (the Fed’s inflationary policies lead to record food prices which incited starvation and civil unrest globally).
Not once during the five year period between 2008 and 2013 when he retired, did Bernanke change course. Any normal person would have reconsidered their positions after $1 trillion or $2 trillion didn’t do the trick. The Arab spring, record high food prices, food stamp usage and the like would also have given most folks pause. Not Bernanke. And apparently not Yellen either (she was the Fed’s second in command for most of Bernanke’s tenure).
We all know how this will work out: another, even larger crisis is looming on the horizon. And this time around, the Fed has already used up virtually all of its ammo. When and how it will hit, no one knows. But the fact that a mere 10% drop in stock prices from RECORD HIGHS was enough to induce panic around the globe should tell you all you need to know about the fragility of the financial system.
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Re: The FED- A ship of fools
In this light, one has to ask aloud, “why would you put someone with absolutely zero experience in creating jobs, growing a business, lending money, hiring, firing, etc. in charge of the US economy.”
The Fed doesn't do any of that..and has nothing to do with any of that.
This writer wants a "Jobs Czar."
The Fed doesn't do any of that..and has nothing to do with any of that.
This writer wants a "Jobs Czar."
If you’re “woke”..you’re a loser.
Re: The FED- A ship of fools
Let’s take the other component of the Fed’s work, the financial markets, into consideration.
Seriously uninformed writer, if he believes that this is part of the Fed's "work."
Seriously uninformed writer, if he believes that this is part of the Fed's "work."
If you’re “woke”..you’re a loser.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
GFB wrote:Let’s take the other component of the Fed’s work, the financial markets, into consideration.
Seriously uninformed writer, if he believes that this is part of the Fed's "work."
Financial markets are not a part of the financial system?
Make America Great Again. Impeach Trump! 

Re: The FED- A ship of fools
planosteve wrote:GFB wrote:Let’s take the other component of the Fed’s work, the financial markets, into consideration.
Seriously uninformed writer, if he believes that this is part of the Fed's "work."
Financial markets are not a part of the financial system?
They are not in any way part of the Fed's work or "mission statement."
The Fed has two Congressional mandates. The stock market is part of neither of them.
If you’re “woke”..you’re a loser.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
GFB wrote:planosteve wrote:GFB wrote:Let’s take the other component of the Fed’s work, the financial markets, into consideration.
Seriously uninformed writer, if he believes that this is part of the Fed's "work."
Financial markets are not a part of the financial system?
They are not in any way part of the Fed's work or "mission statement."
The Fed has two Congressional mandates. The stock market is part of neither of them.
That was originally. Later on more were added.
The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment, stable prices, and moderate long-term interest rates.[10] The first two objectives are sometimes referred to as the Federal Reserve's dual mandate.[11] Its duties have expanded over the years, and today, according to official Federal Reserve documentation, include conducting the nation's monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions.[12] The Fed also conducts research into the economy and releases numerous publications, such as the Beige Book.
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Re: The FED- A ship of fools
If, as some want to do, we get rid of the Federal Reserve, what replaces it?
A bad peace inevitably leads to a worse war.
Re: The FED- A ship of fools
GRANDPA wrote:If, as some want to do, we get rid of the Federal Reserve, what replaces it?
I know the answer to that.
Congress would make monetary policy. Imagine what happens when monetary policy is just another political football.
Thankfully, we never will find out. Lots of people love to hate the Fed. They are the best we could hope for..a mostly NON political entity making such policy. (mostly)..That doesn't mean they always get it right. It just means they're actually, honest to goodness trying to get it right.
If you’re “woke”..you’re a loser.
Re: The FED- A ship of fools
"Over-educated useless people"
November 5, 2024: The day America got Her second chance.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
The idea that the FED is not political doesn't hold water. It's like saying the Supreme Court is not political because they are appointed for life. In reality we know exactly how they will vote on almost any issue depending on their political leaning. Same with the FED.
The FED is 100% politically comitted to fiat money, fractionalized banking, and top down regulation of the banking system. They are all Keynesians who believe unrestrained printing of money and credit creation is the answer to every problem. The have stamped out interest so you are paid nothing for savings. The banks loan out 10 times what they have in deposits at very high interest rates for which they pay the depositors virtually nothing. All the profit goes to the banks.
The FED is no more "Federal" than is FED Ex. It is totally owned by private banks.
The FED is 100% politically comitted to fiat money, fractionalized banking, and top down regulation of the banking system. They are all Keynesians who believe unrestrained printing of money and credit creation is the answer to every problem. The have stamped out interest so you are paid nothing for savings. The banks loan out 10 times what they have in deposits at very high interest rates for which they pay the depositors virtually nothing. All the profit goes to the banks.
The FED is no more "Federal" than is FED Ex. It is totally owned by private banks.
Make America Great Again. Impeach Trump! 

Re: The FED- A ship of fools
planosteve wrote:The idea that the FED is not political doesn't hold water. It's like saying the Supreme Court is not political because they are appointed for life. In reality we know exactly how they will vote on almost any issue depending on their political leaning. Same with the FED.
The FED is 100% politically comitted to fiat money, fractionalized banking, and top down regulation of the banking system. They are all Keynesians who believe unrestrained printing of money and credit creation is the answer to every problem. The have stamped out interest so you are paid nothing for savings. The banks loan out 10 times what they have in deposits at very high interest rates for which they pay the depositors virtually nothing. All the profit goes to the banks.
The FED is no more "Federal" than is FED Ex. It is totally owned by private banks.
Do you think Congress would be more, or less political?
If you’re “woke”..you’re a loser.
Re: The FED- A ship of fools
planosteve wrote:
The FED is 100% politically comitted to fiat money, fractionalized banking, and top down regulation of the banking system. They are all Keynesians who believe unrestrained printing of money and credit creation is the answer to every problem. The have stamped out interest so you are paid nothing for savings.
These are not "political" concepts..in the sense that there are no two or more competing concepts with constituencies for each side.
You may think they are "wrong headed"..but they are not "political."
If you’re “woke”..you’re a loser.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
Holding interest rates to virtually nothing is a political action which has the effect of subsidizing the non productive members of society who can borrow money from the banks at the expense of the productive members who have savings and are paid virtually nothing. You don't have to be a genius to figure out whose ox is being gored.
Make America Great Again. Impeach Trump! 

Re: The FED- A ship of fools
planosteve wrote:Holding interest rates to virtually nothing is a political action which has the effect of subsidizing the non productive members of society who can borrow money from the banks at the expense of the productive members who have savings and are paid virtually nothing. You don't have to be a genius to figure out whose ox is being gored.
Well, since you are trying real hard to MAKE all this political, you have that backwards.
The productive people borrow money to start or expand businesses, or make large purchases.
Far less productive people live off savings.
I hope to become far less productive in the next few years.
If you’re “woke”..you’re a loser.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
The productive people borrow money to start or expand businesses, or make large purchases.
Quantitative easing adds to the problem of income inequality by making the rich richer and the poor poorer. By intentionally driving down interest rates to low levels, it allows people who can get access to cheap money on a regular basis to benefit in extraordinary ways.
The first beneficiaries are the big Wall Street banks, the so-called group of 22 primary dealers, which can borrow directly from the Fed, essentially free. Because banks are in the business of making money from money, they use the Fed’s money to make more money by trading with it, investing it in government debt and pocketing the profit or by lending it out at wide spreads. Thanks to the Fed’s low-interest rate policy, the big banks also make a lot of money by taking our deposits, which they also pay us virtually nothing for – my savings account pays me an annual interest rate of 10 basis points, or one-tenth of one percent — and lending them out at wide spreads. No other business on the face of the earth gets its raw material so cheaply. No wonder bank profits have soared.
Then there is the gift the Fed has given to Wall Street’s traders and investment bankers. The traders benefit because they know – and have known for years, thanks to the Fed’s telegraphing of its quantitative easing program – that the Fed will be a continuing buyer of their risky securities at (ever-rising) market prices. Since the onset of Mr. Bernanke and Ms. Yellen’s policy, the Fed’s balance sheet has grown to $4.5 trillion, from around $800 billion before the crisis. That’s a whole lot of securities bought at high, profitable prices and paid directly to Wall Street traders. The Fed might as well have been paying the traders’ seven-figure bonuses directly.
The Fed’s low-interest rate policies have also been a bonanza for Wall Street’s investment bankers – and their bonuses — as companies around the world race to raise debt capital at low rates. Wall Street, of course, takes a cut of every dollar of debt raised. The steadfastly low interest rates have also propelled the stock market to new highs. That, in turn, has also led to a bonanza of new equity being raised and more fees being paid to Wall Street.
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Re: The FED- A ship of fools
That post reeks of class warfare/ugly politics of envy.
If you’re “woke”..you’re a loser.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
GFB wrote:That post reeks of class warfare/ugly politics of envy.
OK, try this one:
Thanks to the Federal Reserve, the middle class is slowly being suffocated by rising food prices. Every single dollar in your wallet is constantly becoming less valuable because of the inflation the Fed systematically creates. And if you try to build wealth by saving money and earning interest on it, you still lose because thanks to the Federal Reserve’s near zero interest rate policies banks pay next to nothing on savings accounts. The Federal Reserve wants you to either spend your money or to put it in the giant casino that we call the stock market. But when Americans spend their paychecks they are finding that they don’t stretch as far as they once did. The cost of living continues to rise at a much faster pace than wages are rising, and this is especially true when it comes to the price of food.
Someone that I know wrote to me today and let me know that she had to shut down the food pantry that she had been running for the poor for so many years. It isn’t that she didn’t want to help the poor anymore. It was that she just couldn’t deal with the rising food prices any longer. Now she is just doing the best that she can to survive herself.
Perhaps you have also noticed that food prices have gotten pretty crazy lately. In particular, meat prices have become absolutely obscene. For example, the average price of ground beef has risen to a new record high of over $4.09 a pound. Over the past twelve months, that works out to a whopping 17 percent increase…
- See more at: http://www.thedailysheeple.com/low-infl ... 18XXo.dpuf
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Re: The FED- A ship of fools
planosteve wrote:GFB wrote:That post reeks of class warfare/ugly politics of envy.
OK, try this one:
Thanks to the Federal Reserve, the middle class is slowly being suffocated by rising food prices. Every single dollar in your wallet is constantly becoming less valuable because of the inflation the Fed systematically creates.
That's what the stock market's for..beats the heck out of inflation.
If you’re “woke”..you’re a loser.
Re: The FED- A ship of fools
planosteve wrote:GFB wrote:That post reeks of class warfare/ugly politics of envy.
And if you try to build wealth by saving money and earning interest on it, you still lose because thanks to the Federal Reserve’s near zero interest rate policies banks pay next to nothing on savings accounts. The Federal Reserve wants you to either spend your money or to put it in the giant casino that we call the stock market.
So, this guy says..saving sucks because you get no interest. But the stock market sucks, too.
I'm supposed to what..feel bad for dipwads like this?
Since I do both..(keep some savings around as well as willingly put my hard earned money at risk in the financial markers)..sorry, no sympathy from me. All I can do is try to help by telling them what books I read in order to join the winners..and leave the whining behind, forever.
If you’re “woke”..you’re a loser.
- planosteve
- Posts: 23856
- Joined: Sun May 25, 2014 8:04 pm
Re: The FED- A ship of fools
If you believe that intest rates, the price of borrowing money, should be dictated by the centeral bank rather than by the marketplace, you are advocating Socialism where prices are dictated by the govt.
Of course only a dipwad would point that out.
Of course only a dipwad would point that out.
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