Ricks Picks header image

“Dear Ms. Yellen…”

102 comments

With Lawrence Summers out of the race by his own choice, Janet Yellen looks all but certain to succeed Helicopter Ben Bernanke as chairman of the Federal Reserve. Do you have any advice for her? That is the Question of the Week, and we are encouraging all who post on the topic to speak freely. Scholarly citations from The Creature from Jekyll Island will be especially welcome. Personally, we doubt the choice ever mattered, since the Fed was designed by the Banksters as a self-perpetuating scam that can steer itself as competently as Google’s driverless car — albeit with the help of such useful idiots as Paul Krugman, the U.S. President (whoever he is) and the editorial boards of The New York Times and The Wall Street Journal, all of whom have either implicitly or explicitly endorsed and/or helped to perpetuate such nefarious schemes of the feather merchants as Quantitative Easing, fractional-reserve banking and, of course, central banking itself.

Summers was widely perceived as the monetary hawk, Yellen as the dove – a divide with implications that were underscored by the exuberant leap gold and index futures took Sunday night on the news concerning Summers. The hawk/dove thing really boiled down to Tweedle-Dee or Tweedle-Dum, though, since neither Yellin nor Summers – nor Joe Blow, for that matter – will have any flexibility in maneuvering interest rates. How could they when every uptick in real rates brings the global financial system’s quadrillion dollar Ponzi scheme an inch closer to collapse?

Your turn, readers….

Please do not ask trading questions!

  • Redwilldanaher September 23, 2013, 4:48 pm

    Rick has been playing rallies all along Gary. So have I and others. You need to understand that it is possible to see hyper fraud and yet still invest in that direction. We just don’t try to explain it all away and act as would be propagandists for the manipulators.

  • Redwilldanaher September 23, 2013, 2:33 am
    • gary leibowitz September 23, 2013, 3:31 am

      Like I have said all along the debt saturation will eventually cause a deep depression. It’s all in the timing however and I for one have stuck to the notion that it didn’t happen yet, unlike most here. In fact I am still counting on a bout of good old fashion economic acceleration before this all ends badly. I know everyone absolutely knows that can’t happen, but this naïve person still believe it.

      Did you actually read my post before targeting me? I couldn’t have been any clearer. Even RICK is playing the rally. I guess you should get on his case also for abandoning the cause. It is a cause isn’t it?

      &&&&&

      Cause? It’s just impulse legs to me — dots that move up and down on price charts. RA

  • Rich September 23, 2013, 1:55 am

    Two more relevant if irreverent factoids re the Fed ~

    If the Federal Reserve, billed as Constructive Currency Acts to Aid Business by President Wilson and the Press on Christmas Eve Recess 1913, when most people were distracted by holidays, then why did the several Banking Titans and Senators travel under assumed names in private railroad cars from different stations as G Edward Griffin so astutely noted?

    http://upload.wikimedia.org/wikipedia/commons/7/7a/Fed_Reserve.JPG

    In fact, the Private Central Banks scheme was repeatedly defeated in prior years by Congresses representing the best Constitutional interests of US Citizens.

    They noted the Founders who wrote and ratified the US Constitution mostly eschewed central banks, which repeatedly failed in the USA.

    The other factoid is a corollary of the discussion of the fair price of gold.

    Not everyone knows that Federal Tax Revenues of $2,690,407,000,000 are currently exceeded by US Total Interest of $2,821,756,000,000, meaning the IRS does not even cover Federal Reserve Note usury unless interest rates drop precipitously again.

    http://usdebtclock.org/

    There may be no real taper on paper so long as there is a Fed. Who would buy US deficit IOUs as surplus nations China and Russia have been net sellers of Treasuries?

    Only Abe, who is prefiguring more inflationary US monetary policy…

    If the Fed and Federal Reserve Notes fail, then would the US Treasury try the state-owned Bank of North Dakota model, issuing precious Continentals, Greenbacks, Gold and Silver Certificates?

    Stay tuned. Things are about to get vastly more exciting and volatile with the Debt Ceiling Obamacare defunding debate in Congress and Dow/SPX higher-priced substitutions this week…

  • Rich September 23, 2013, 1:28 am

    Thanks Cam and Mario for spotlighting the cash reserve economies of Asia and Africa. No doubt the drug, illegal alien and underground welfare US economy has similar features. Although the IRS Treasury require $3000 plus currency reporting by financial institutions, the sale of American Eagles, Antiques, Art, Jewels and safes took off.

    The curious thing is that $SSEC went from 5954.77 in October 2007 to 1728.79 in October 2008 in tandem with the $SPX, a decline of -71%.

    Unlike the $SPX, up +156% since March 2009 lows, the $SSEC is up but +27%.

    Is Chinese security transaction reporting as tight as the US, or is it flight capital running from the many ghost towns you claimed do not matter?

    Thanks and best with the book.

    Not that hard to get on Amazon if you wish:

    http://amzn.to/17VlX6Y

  • Cam Fitzgerald September 22, 2013, 8:19 pm

    I think this thread is worn bare Rick.

  • mario cavolo September 21, 2013, 6:03 am

    Let me take a moment to separate and observe what seems the two core issues.

    1. Forms of QE by the U.S., Europe, Japan and China.
    2. Real Demand

    Any type of crisis disaster rooted in #1 will damage and derail the world’s economies. This is obvious and all related woes, worries and venomous anger have been well discussed here at Rick’s However as to when and how the next sort of 2008 may come is anyone’s guess from six months to twenty years. Rick’s forum has a huge body of work well explaining the concerns about governments “supporting” their economies by issuing trillions in debt to shore up banks but not while also offering up any such meaningful measures of support directly into their domestic consumer economies. The American societal shift and schism is deeply disturbing, economically, culturally and politically. What a mess.

    2. Real Demand

    Here is where there seems to be more confusion than there should be and must be cut down into a few well-defined consumer groups. The fact is that overall demand is holding up but needs a closer look:

    United States

    a. America’s lower/middle class of 100-150 million or so continue their struggle. Flat wages, less economic opportunity to improve their situation due to societal/economic/technology driven change.

    b. America’s stable middle/upper middle class, with reasonable evidence this group numbers around 100 million. The buying power and stability of this group is consistently being underestimated. Someone, somewhere is still buying a respectable amount of goods and services; retail goods, rail traffic is up, auto sales are strong. And importantly to note is how it is the higher-priced end of the spectrum which is doing particularly well; sales of higher priced retail items are holding up well.

    Negative approaches are giving too much weight to the first declining group and not enough weight to the stability and spending power of the stable, spending second group. By proportion of economic power and weight, the second group has FAR more buying power and discretionary income than the first group. Whether at the expense of anyone else is besides the point, fairness is a separate ethical discussion, while here we’re just looking at real overall demand.

    So, this is the group to pay attention to. No one in the bottom 100 million is buying cars nor homes nor having dinner at Outback Steakhouse more than twice a year. See my point? The low end consumer market is struggling, we see that with the current state of affairs at Walmart and other budget level retailers and restaurants. But the second group is apparently living a very nice life without feeling too overburdened on the edge of a financial crisis. There kiddies are in nice schools and universities, they eat out at $20-$30 per person very often, they also shop at Sam’s club/Walmart to save on some household items, but they also seem to be spending “enough” at higher priced retailers and service providers and have their debt loads at reasonable levels. We don’t see any evidence that this is not the case.

    When you combine the two, we see overall anemic growth that’s throw up alarm bells. But when you separate the two, the economic lifestyle and spending of the second group has far more weight in TODAY’S United States economy.

    Europe – I don’t have too much to say here. Their domestic economy overall seems even weaker than the U.S. and this puts negative pressure on demand for global goods, imports/exports, etc.

    Asia led by China

    U.S. EXPORTS to China have hit a record 100 billion plus and are now growing with strong momentum at 15% per year. An effort by the U.S. to greatly focus on this export market is wise and in the past couple of years they are finally doing it. Say thank you and encourage it.

    China imports/exports and domestic retail spending remain on a strong course. As I mentioned in separate post above, China’s 300-400 million rising middle class are THE group to pay attention to. If you think of them as a voracious yet quiet monster of biblical proportions you are holding an accurate view. The trick is to understand that in Chinese culture, people are quite and subdued and private and hidden about their lives and they money they earn. They look plain as a paper bag to any of us, they supposedly earn $500/salary a month, they say goodbye and drive off in their new $25k Buick Excelle for which they paid cash and the foreigner is left scratching his head in wonder. This is normal in China amongst this group, so I am talking about the reality across an entire society. The govt’ gets it, the people get it, they all know what is “normal” in China.

    I mention its significance to the rest of the world’s economic concerns because it will continue to be a rising demand growth driver for the next 30 years, it is a macro trend in a society that has just begun its major domestic expansion but has started from a BASELINE of $9 trillion GDP. So when Robert Fogel, Goldman Sachs, the United Nations, IMF and Indira Nooyi CEO of Pepsi and many others all state that world GDP will hit $200 trillion in the next forty years from today’s $40 trillion with China representing 40% of the total, I’m going to side with them. This force is so strong it is leading the rise of demand growth across the entire APAC region and is mystically in the shadows supporting the global economy.

    The problem between the U.S. and China isn’t economics, its politics. The U.S. has economically shot themselves in the foot regarding policy and trade with China while China, as anyone would, has fully taken advantage of every situation they could to benefit their own country. But now the tide is turning, the economic sands have shifted substantially, its a new, playing field with a new set of rules. The economic foe becomes the needed economic friend.

    90% of all Chinese visa apps to the U.S. are approved. Hey, why? For one, because the American govt realizes that’s incoming money onto U.S. shores. Chinese tourists are BY FAR the largest spending tourists on the planet, even surpassing the Japanese. Chinese investors has massive amounts of money to invest, courtesy of twenty years of an off-the-books shadow cash economy. Chinese tourists earning $500/month do NOT have a savings rate of 30-50% as reported. That’s not where they get all their cash from to spend while on holiday in the U.S. They have that money because in addition to their salary they earn “wai kuai” which means in America terms “earn extra money on the side”. If a rising group of 300-400 million middle class “behave” this way in a society, that is obviously a very powerful force and asset source for ongoing demand growth.

    We may personally like or dislike the puzzle pieces in the above narrative ranging from the Fed policies to Washington politics to how the U.S. sold out jobs to China and a dozen other legitimate causes of angst and worry. With the U.S., Europe, Japan and China, the major power blocks of the world all have now gone credit crazy in some way, the foundation of the global economy going forward has a new structure with new rules. Rick and many others will be the first to say its obviously unsustainable, it will create unpredictable ripple effects and finally lead to economic disaster, only the naive could disagree. But meanwhile, this is it, this is the new state of affairs with all its plusses and minuses and until it blows up, rock on as best you can within the societal and economic circumstances you find yourself in. Seeing the new state of affairs as it is, it is then as it truly is, it is a duck and therefore it quacks. That’s what ducks do. Throw it some popcorn.

    Cheers, Mario

    • gary leibowitz September 22, 2013, 2:50 pm

      Nice synopsis of the global economic interplay. Isn’t it true that China still relies on American demand for goods at a disproportional level? While their domestic economic growth has rivaled what we did over one hundred years ago, they still need us as trading partners. The credit craze you mentioned has been going on here and in Europe for a long time. The debt saturation has finally spilled over and now we struggle to inflate our way thru this. Clearly deflationary pressures from all this debt is creating headwinds of enormous proportions. While I agree we can possibly sustain our domestic economic engine with the strong backing of the upper middle class, that too will erode if we don’t drastically reduce our debt. No here is the catch-22. To reduce our debt at this time will cause an economic contraction that could push us over the edge and a deflationary spiral can occur. To sustain our current spending will never relieve the overhang of debt and allow us to clear out the insolvency.

      I am of the opinion that we only have years, not decades before we see a world depression. China will get hurt from their over expansion at a time when the world is contracting. Since their country is in such an infancy state, economically speaking, they will emerge quicker and stronger than all other nations. I do not however believe we can escape from some sort of purging resulting in an initial deflationary spiral where defaults and insolvency result.

      The catalyst that pushes us over will most likely be a back-to-normal banking policy. Once lending picks up, and we revert back to over use of credit, we seal our fate. I believe we are working in that direction now.

  • Redwilldanaher September 19, 2013, 1:50 pm

    http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/09/20130918_working.png

    “It’s working Gary! It’s working!”

    Best graphic I have seen recently…

  • Cam Fitzgerald September 19, 2013, 7:03 am

    Mario, did you catch that news that Beijing and Shanghai property prices were up 19% in August!! NINTEEN PERCENT. (Year over year we shall presume). And that is a huge increase in what is already the worlds bubbliest and most frothy housing markets. But has it now gone parabolic or threatening to do so? I have not seen the juicy charts yet but can only guess the inevitable bust just got a little closer now that sanity has officially left the building and the spiggots got opened to a torrent. The great credit binge continues so your adopted home is now officially going to be on a credit deathwatch. I am just betting that G20 meeting was a blazing success as all the guys knocked heads in unison and came up with “Lets blow this credit sucker sky high so we are immortalized for eternity” thinking. So now it looks like we can all get back to the real business of discussing how it will be China that takes down the global empire of Credit and not the USA. Let the games begin!

    PBOC’s Un-Tightening Sparks Renewed Bubble In Chinese Property Prices
    http://www.zerohedge.com/news/2013-09-18/pbocs-un-tightening-sparks-renewed-bubble-chinese-property-prices

    • mario cavolo September 19, 2013, 2:24 pm

      Yes Cam, its a whirlwind, a rollercoaster, and a carnival all wrapped up in one! I’m really glad you brought it up because I’m in the middle of a 4 day author book signing table at California Week here in Shanghai and so I’ve spoken with over a dozen people today at length about the view expressed in my book.

      I will tell you my view clearly. It will most likely continue for another two decades or so before some type of something blows it all to smithereens.

      I do have a very specific reason, very specific, for my view.

      Forget the poor folks because they are 700 million poor farmers and life for them doesn’t change much. They have lots of food and roofs over their heads so in fact, better to them in China than poor in the U.S.

      Forget the wealthiest wealthy. They are the same in EVERY country whether the U.S. or China or Europe, etc. They are obscenely (over $100 million) rich, the untouchables.

      That leaves what is in fact the MOST important group in China of all: the lower/middle class group of urbanizing, rising 300-400 million.

      You with me?

      THIS group is FAR richer than any statistic indicates. I estimate, quite reasonably that the top 100 million of this group, let’s call them the elite hardworking entrepreneurs of the group HAVE USD $6 to $10 TRILLION more than the official reported stats. And there is little to doubt that assertion. Even Credit Suisse noted in their 2010 report with Prof. Wang Xiao Lu that lower/middle class household incomes were actually 2-3x higher than officially reported and the discretionary spending was 90% higher than officially reported.

      Its important to understand that by its nature in the past 20 years, it HAS BEEN a cash economy, much of it off-the-books. You mentioned the similarity with where you are in Africa – all cash, no credit, no debt, etc.

      I believe that this rather straightforward explanation goes far to explaining the how and why of what is happening here in China’s domestic economy.

      More specifically to the housing market. There is SO much money, so much cash floating around with far less mortgage leverage that the broad housing market will be supported for 2-3 more generations. Keeping in mind that China’s growth is relatively speaking to other countries historically is JUST getting started, it only really began ten years ago. In the U.S. the same trajectory took 50 years. China out of nowhere became the world’s #1 auto market, from nowhere to #1 in FIVE years, that’s nuts. And the market hasn’t EVENT gotten warmed up yet in terms of how many urban households own cars!

      So, ONLY in select markets as you noted: Beijing, Shanghai, Shenzhen, Guangzhou…there are areas with CRAZY high prices at $1000/sq ft in the luxury sector.

      BUT in the broader normal, family housing market, such as 2nd tier city Shenyang in the new area where my wife and I own an apartment in a growing, nice new area of the city, our apt price has gone from $80/sq ft to $130/sq ft in the past 2.5 years. That is TODAY in China much more typical of the broader market across the suburban 1st and 2nd tier urbanizing cities of China.

      Now keeping in mind that this group of lower/middle class folks I am referring to has ALOT more money than anyone realizes, I conclude that domestically the market is in good shape.

      So now China is in the same boat as the U.S. Unless and until some type of specific, large enough financial crisis hits the market rooted in the actual govt banking system, all is well and may easily continue to be so for another couple of generations. I am allowing for the possibility that some kind of financial disaster will strike, but must also keep in mind that China’s central govt is FAR more capable of responding to it than the U.S. which is in a state of gridlock for a variety of reasons. Beijing has many way it can open to stimulate or close to slow down, the U.S. simply doesn’t have that flexibility to respond on the fly.

      I really hope this makes sense to everyone because belive me it is incredibly important to understand about China compared to western situations.

      If you might ask about my book, it is not yet available in the U.S., I’ve only issued the First Print Edition Asia Pacific and that has been my business focus lately.

      Cheers, Mario

    • Cam Fitzgerald September 19, 2013, 7:23 pm

      Those are good points actually. I appreciate what you mean when you talk about hidden wealth too because as I also note over here, much of it is off the books. Savings accounts are not common either especially amongst rural folks. The tax system is weak, the majority of people living locally pay no property or income taxes. Business’s sometimes collect and I suspect don’t remit thus capturing an extra share for themselves. Employers don’t pay tax on behalf of workers in many cases and to be honest it appears to me much of the economy is off the books. China I know is quite a bit the same out in the country. All cash economies are very difficult to measure and so making GDP calculations amounts to best guesses and assumptions. I was honestly very surprised by the level of savings when I first came here. Nobody advertises it either. It is only when you get to know them the truth seeps out bit by bit. Setting aside 20 to 30% of salary seems routine….it is much more for kids living at home with parents and this is off dismally tiny incomes. It really adds up though. A friend just bought a condo in the capital here all-cash. It amounted to 25 times the average salary. And I am like….hunh? I thought you were poor! That was a big surprise. It is a lot like China here right now with a bubble in housing prices to match but as you often point out about China, private homes are mostly paid free and clear. Pretty hard to set back an economy where private investment is that strong. My problem though is with how real estate in general is being used to collateralize local government debts in China and how corporate debt has expanded so sharply through real estate backed borrowing. These economies get their land bubbles exactly because of how property is being treated, not necessarily through high demand for impossibly rich prices. In fact it pays to bloat housing in such situations because that is the source of the wealth driving growth. Nobody seems to have the guts to turn it off once begun. Anyway, glad to hear you read that post I left. Nobody responded so I figured I was just wasting air taking the subject up. There is a real mythology about what poverty really is as I am sure you will also appreciate. The Western view is just incredibly out of touch. We cannot really begin to discuss the vast disparity between living standards without taking into account the expense side of the ledger. Everyone fixates on income differentials but obviously that is just half the story.

    • BKL September 21, 2013, 8:24 am

      Those Chinese real estate numbers are not a good sign. The Chinese have just gone through about two years of policies, specifically designed to get the real estate bubble under control. China is close to some kind of credit explosion, or I’m not a bearish old guy.

    • Cam Fitzgerald September 21, 2013, 8:56 am

      Have a look at this article from Financial Sense, BKL. It is from Puru Saxena relating how the Hong Kong bubble now sports prices coming in at an astounding 2400 dollars a square foot! Look away friends…..this cannot really be happening. It is different this time (of course)……..but how can we get short other than to buy a little gold?

      Puru Saxena: Fed Blowing Massive Bubble in Hong Kong Real Estate; $2400 Square Foot Listings!
      http://www.financialsense.com/contributors/puru-saxena/fed-blowing-massive-bubble-hong-kong-real-estate

    • BKL September 21, 2013, 9:42 am

      Thanks for that, Cam. You should listen to Puru’s interview with Goldseek.com. He is quite bearish on gold. Likes the current trends in U.S. real estate and equities, but he is always ready to change directions quickly. The backwash from the Chinese situation is unpredictable. The interview was done pre-non taper.

      http://radio.goldseek.com/celente.09.13.13.php

  • gary leibowitz September 19, 2013, 5:29 am

    What if the economy, which has lasted 5 years since the crisis, actually starts gaining steam? This is not a moot question. Most here believe that the fractured system from 5 years ago will somehow break up totally. I on the other hand actually expect real GDP to rise way above 2 percent, real wages to eventually outpace inflation, real permanent jobs to come back. In other words some semblance of the “normal” cyclical nature of boom/bust.

    I state this because it seems hard for me to grasp how this economy crashes again without having that springboard. From such low wage, low sales, low job growth how can we fall hard? I suppose if policy makers really screw up and take all supports from the system we could crash. But barring that scenario it seems almost impossible.

    Not being an economist I am sure there a gaping holes in such logic. If everyone here keeps acknowledging the fact that we are still treading near the bottom, how much damage can there be going forward to fall way below the assumed bottom? Just like Gold. If 1100 an ounce is considered extremely low in this environment what would make it fall to say 500?

    If everyone here is correct in assuming that the saturated debt level is too great where sustained economic growth becomes impossible, how can we have a hard landing if we never took off?

    These last 5 years has been on extraordinarily low interest rates. The text book definitions are thrown out the window, for now. Low rates world wide, housing crawling back at the largest pace of any segment these last 5 years, followed by financials. Debt to GDP continuing to rise yet borrowing pressure is subdued, lenders sanguine, and the save haven of Gold contained.

    I don’t get it! The old paradigm is gone. No one has ever imagined how the old definitions of inflation and deflation can be turned on its head. Even if you believe there is massive manipulation, how can that possibly keep all factions happy?

    The only current scenario I can see happening is a decent drop in equities without much impact on the economic engine. I am sure I did myself in for this speech. Outrageous or naïve or both.

    • Jill September 19, 2013, 3:55 pm

      I can’t see a decent drop in equities happening until a couple of years or so down the road. We could have a pullback, perhaps when we reach Rick’s number– perhaps caused by the threat of government shutdown and/or default on U.S. government obligations when the debt ceiling vote comes up soon in Congress. But I don’t see any big decline comeing soon.

      Of course a couple of years is not such a long time for all the Bears to wait for their big decline. But I think the Fed jugglers can easily keep all the plates still spinning in the air for that length of time before they all crash down.

    • Redwilldanaher September 19, 2013, 5:18 pm

      The “economy” hasn’t lasted 5 years. Extreme manipulation in all conceivable forms has levitated an UNreal economy. The fact that you continue to insist otherwise in combination with the parroting of falsified government and corporate statistical propaganda and a penchant for mischaracterising people’s arguments while acting as if you’re the most obtuse person on the planet, are some the reasons why most posters in this forum take issue with you. While I am at, please note that I’m requesting a halt to your calls for others to join you in adventures in extreme rationalisation. Some of us prefer the unvarnished truth.

    • mava September 19, 2013, 6:51 pm

      What if an old beater of a car, 20 year old ford probe actually self-repair and becomes a top-performing race car tomorrow, Gary? I do admit that would definitely get me thinking and guessing and running back to my books.

      Same with economy. How do you expect it to maintain and even improve without any means whatsoever to do so?

      The cyclical nature of market intervention does not represent anything that last. At best it represents the market having to waste more and more of it saved accumulated capital to repair the damage each time the government intervenes. That supply of capital is not being replenished, now that the interest rates had been shut down. We are presently eating thru our seed supply, Gary. If I could find you the best analogy for the boom/bust cycle natural regression, it would be the water boarding torture. Each time the prisoner is forced to use previously accumulated energy to recuperate, but at some point his stored energy will end. There is no “what if” here, Gary. I can guarantee you that anyone you torture like that will die, unless you stop the cycle.

      I disagree vehemently that we are anywhere near the bottom. We hadn’t have any correction whatsoever yet. This is the reason for your confusion, – you think we had a correction, but we hadn’t!

      The gold should have hit 50,000 USD. Did i come anywhere close to that? No. So, what correction are you talking about?

      What is a correction? It is a regression to the mean. What is the mean? All gold must equal in purchasing power all other “non-money” money. That gives us 50,000 USD. (Actually, “did give us”. I haven’t done that calculation since 2007…). So, only once gold crosses USD 50,000 per troy ounce, we can say we have touched the mean, and can possibly bounce off, unless we will over correct.

      What definitions of inflation and deflation are you talking about, the ones that are out of the window? As far as I am aware all the definitions are still holding fast. Please, clarify…

    • Rich September 23, 2013, 12:53 am

      There are various ways to value US Reserve gold (if it in fact still exists after Goldfinger, Diehard with a Vengeance and 9-11 scenarios, with no complete deep storage audit including assay since 1953 to verify it is not gold-plated tungsten.

      Taking official US Gold Reserves of 261,500,158.5 ounces officially valued at $47 an ounce, we can divide US gold reserves into various Fed and Treasury monies to hazard its current value:

      A) $3,485,902,000,000 monetary base/261,500,158.5 ounces = $13,330 gold

      B) $12,004,600,000,000 Money Zero Maturity/261,500,158.5 ounces = $45,906 gold

      C) $16,948,476,000,000 US National Debt/261,500,158.5 ounces = $64,812 gold

      D) $125,803,722,000,000 US Unfunded Liabilities/ 261,500,158.5 ounces = $481,084 gold

      E) $231,600,000,000,000 OCC US Derivatives/
      261,500,158.5 ounces = $885,659 gold

      Most of these astronomic numbers simply defy comprehension or imagination. Few except perhaps Ron Paul and Murray Rothbard understood for a long time that Fed numbers would exceed trillions.

      As previously noted on RA, correspondence with Milton Friedman and Alan Greenspan was skeptical there would be any return to the Constitutional Gold standard, although Dr Greenspan wrote an essay advocating gold in the 1966 Capitalism, The Unknown Ideal, edited by Ayn Rand.

      Dr Greenspan, a Juilliard dropout jazz clarinetist and saxophonist who played with Woody Allen and Stan Getz, was rumored to use an implicit gold price money/real interest rate rule during his second longest tenure at the Fed from 1987 to 2006.

      In any event, if present monetary trends continue without disruption, gold could be priced anywhere from $13,330 to $885,659 an ounce.

      If we have the long-awaited debt default deflation Jubilee, then all bets are off, as whatever legal tender with a significant reverse split replaces the Federal Reserve Note could be worth the $50 face value of the one ounce American Eagle Gold coin.

      Since there is no free lunch, Gresham’s Law, “bad money drives out good,” suggests gold, silver and even copper may hold value better than Federal Reserve Notes…

    • mava September 23, 2013, 4:40 pm

      Rich, thank you for a nice baseline post. This really helps to put things in perspective for those lost in government propaganda.

      I’d like to add, that in my opinion, whatever the new money we can ordain in place of the paper dollar, – it would not matter. For while the new money can indeed easily be made to equal, say, one ounce of gold for each 50 units, the economic meaning behind that would still mean that those 50 units would have to contain the same amount of purchasing power as would 13,330 to 885,659 of paper dollars!

      Meaning, of course, that holding gold would still give one exactly the same advantage, no matter what new currency is invented. This is because the economic meaning behind holding gold is that you hold the currently terribly undervalued asset. It is exactly the same meaning as if tomorrow for some reason you could have an opportunity to buy an Apple stock for a penny a share. Would you think twice before loading up on it? Of course you wont.

      The whole entire wisdom of speculating is the wisdom of knowing the value, as distinct from the currently traded price. From knowing, or being able to estimate that, comes the arbitrage opportunity. This is why speculation is far from being a trade for everyone. Most people are incapable of knowing the value, – all they can ever see is the current price. And had the price of gold risen this morning to $800,000 an ounce, these “most people” would be just as sure that this price is the proper price as they had ever been, and just as yesterday, when gold traded for $1300 an ounce.

  • mary September 17, 2013, 9:50 pm

    Ya know, I really don’t find these doomsday scenarios prescient. Look around you, fgs, it has all ALREADY happened.

  • mava September 17, 2013, 9:31 pm

    “Personally, we doubt the choice ever mattered, since the Fed was designed by the Banksters as a self-perpetuating scam that can steer itself as competently as Google’s driverless car — albeit with the help of such useful idiots as Paul Krugman, the U.S. President (whoever he is) and the editorial boards of The New York Times and The Wall Street Journal, all of whom have either implicitly or explicitly endorsed and/or helped to perpetuate such nefarious schemes of the feather merchants as Quantitative Easing, fractional-reserve banking and, of course, central banking itself.”

    Must I always be the one to piss into the wind?

    There is nothing nefarious about FRB, CB, QE or the FED in and of themselves. This last qualification is very important.

    In fact, it doesn’t matter what scheme we run, fractional or full gold standard. It would be still just as subverted as it ever was.

    Not too many people will ever strip this last layer of deception and call a spade a spade, but, I will. Here it goes:

    None of this would ever be a problem if we did not have the institution of legal tender, and conversely, as long as the government enjoys the opportunity to violently declare what constitutes money (yep, you, the constitution lovers, it started right off the bat, the violent demand is in the constitution itself) by means of something like the legal tender law, it doesn’t matter what system we try, – they all will avail themselves to serve no more than being a useful tool of impoverishing the majority for the benefit of the minority.

    The problem, is not even that our money is stupid. It is with the fact that we are legally required to use these money. Had we simply had the right not to, then the dollar with all of it’s problems would be exactly where Soviet Ruble is, as far as we are concerned, and the FED would also had no reason to exist.

    As for the FED, it is debating the candidate for the next president so hotly precisely it absolutely matters not. The FED is a theater for the gullible.

    Finaly, Yellen? What would be your with to Adolf Hitler?
    That is exactly my with for Yellen. Why should it be any different? I do not want her to dictate anything for me, yet she intends to. Thus my advice to her: make sure you always have plenty of potassium cyanide, – you never know when you will have to use it.

    • Craig September 18, 2013, 1:08 am

      So mava….are you one of those Harvard constitutional lawyers that can’t comprehend and argue that “shall not be infringed” means change whenever or however it benefits the state? “The People” actually means the Fed Gov or offshore corporation (supreme court descisiom).

      Taking the constitution out of context does not make you a Harvard Lawyer. The money system you speak of is to only be coined in gold and silver. Like our current financial system you replace free market with crony capitalism and blame free market to bring in communism.

      You don’t need gold and silver to have sound money system…you just need the people in
      charge not to increase by more then the population increases, gold and silver naturally do this by limited supply….keeps em honest. Therefore you need useful idiots parroting Harvard lawyers to help get rid of gold and silver (or any controls) by saying what the constitution says is not what it says and 40 years later the system brakes from just a little more here and there every year and it’s done. Then we get to hear (or read) the kin of the last generation of useful idiots who helped reinterpret the constitution say….it doesnt work, it’s a living breathing document or even that it caused this.

    • mava September 18, 2013, 9:24 pm

      Craig, I don’t have any idea of most of the things you’ve named here. I don’t know who says what. And I think I should not try to find out. I omit entirely all of the propaganda too. I watch absolutely no TV for many years.

      So, I simply blank out when you say things like that, that are based on my supposed knowledge of current public affairs. Harward Lawyers?

      Instead, I prefer to focus on direct opinions and arguments on particular subjects. Such as:
      Are you in favor of legal tender? Or not? Do you have an opinion or do you prefer not to have an opinion on this matter and instead use that of founding fathers (the constitution?).

      The way I see it, the constitution only worth keeping intact if it worked. But, it is plainly evident that it didn’t. We have what we have now, and if the constitution worked, it would still be the law of the land. For you and I not to follow the constitution would not be a matter of opinion, nor would it be up to us if it is a living and breathing document or not.

      It is self evident that the constitution is powerless to defend even itself, how can I expect it to defend me?

      And if it is powerless, then why do you defend it, other than may-be arguing in favor of a particular provision, taking from it. Or, against, as it is in my case, where I argue that the legal tender law is the cornerstone of destruction of any system, even the most perfect system of all, the 100% gold backing system.

    • Craig September 18, 2013, 9:46 pm

      How do you knock down something you obviously have never read? Never mind, your comeback proves everything I have said about the dumbed down and ignorant masses getting in the way of saving the nation….the great news is once everything collapses and we rebuild this great nation we won’t have to rewrite the constitution…we can just copy it and sign it.

    • Craig September 18, 2013, 10:26 pm

      It is so revealing that all the “conspiracy” people use facts and examples while all “deniers” use feelings and it can’t be that corrupt and never read one thing just have the same opinion as what Madison ave and MSNBC or Fox tell you should have…outside of those two opinions…you are labeled an extremist.

    • mava September 19, 2013, 6:31 pm

      Again, skipping the rants, do you have an opinion on the concept of legal tender, or all you have is your emotions?

    • Craig September 19, 2013, 8:34 pm

      Legal tender is anything that can exchanged easily for goods and services and is readily in demand and liquid. That includes all countries currency…why is that? Because there is demand for that currency….why is there demand? Because it is the only form of payment of taxes in that country. Even if it inflates to death will it still be currency? Yes because taxes must be paid. The saying “bad money pushes out good money” applies here. Good money (gold) stays in the safe and under beds because bad money is used to get rid of I as fast as possible to pay taxes get stuff now or convert to good money. Good money will not circulate. Is bitcoin or gold/silver legal tender, no, but it is sound money to those that are educated. Will they be, prob not but when all the bad money is dropping in value…that is all that will be “saved” by more and more people until the current legal tender becomes so unpredictable that only “good” money will be used (for a very very short time) until a new legal tender is introduced (special drawing rights, look it up) becomes the standard of the banks and all currencies will be based off to make people accept a world gov. Bitcoin should pop due to limited supply but will be sabotaged in some way at some point. Gold has no master except those who own most of it, and they are getting close to that too.

      You are amazing, once again project your faults onto who you are arguing with…you show no facts, history, get called out on it and say I and others have no facts. Name calling next because you have nothing to argue with. The currency is done because they have gone outside the constitutional definition of it and have debt of 700% of GDP (including unfunded liabilities) and have more debt than 50%-100% of the value of all assets on earth. Because they did not follow the constitution. So let’s throw it out because no one followed it.

    • Rich September 23, 2013, 12:04 am

      US Constitution Article I
      Section. 8.

      The Congress shall have Power To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

      To provide for the Punishment of counterfeiting the Securities and current Coin of the United States

      [The US Mint penalty for counterfeiting legal tender was hanging]

      Section 10

      No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts,

      [Guess FDR missed that part when he outlawed domestic gold and gold contracts in 1933]

      Every Federal Public Servant from the President on down takes a similar Oath of Office:

      “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”

      Interesting the Fed Chair takes that same oath of office, although the Fed is a 6% dividend-paying leveraged usury money franchise private central bank with hidden bank nominee owners

      http://www.c-spanvideo.org/program/191059-1

      Maybe the secret owners are why W said the Fed has assured economic growth and stability since 1913

  • John Jay September 17, 2013, 7:03 pm

    Thanks, Red and Cam!

    I will go a bit further and predict that if the housing market/MBS paper market collapses again, the Federal Government will just, in effect, Nationalize all the housing units with mortgage paper backed by them.
    Which is most of the RE market I believe.
    This will paper over, once and for all time the MBS fraud where the same mortgage was used as collateral for as many as ten MBS securities.

    So the hapless homeowner just pays his 30 year mortgage payment to JPM/C/BAC/GS etc. who take their cut and pass the rest on to Uncle Sam.
    Brilliant!
    So the 9 out of 10 securities that are not receiving any revenue are just dropped down the “Memory Hole”.
    What problem?

    Uncle Sam gets a new, perpetual revenue stream, the MBS fraudsters, keep their loot, plus gain a perpetual revenue stream of their own “Servicing” Government mortgages.
    Everyone wins!

    With most of the nation working part-time, actually buying a house will be for the Lords and Ladies of the Kingdom I imagine.
    Everyone else, just rents from Uncle Sam!
    The folks with paid off homes present a problem, but, I am confident they will robbed in good time.
    Property taxes, and some new transaction taxes are likely the means to that end.

    Anyway, that will be a ways off in the future, but that is my rough vision of the future.
    Many permutations are possible.
    Time will reveal all!

    • Craig September 17, 2013, 8:06 pm

      John,

      You left out the best part of the nationalization of US housing….your landlord the gov needs to “inspect ” the rental…if they see anything out of line like blue eyed blonde cute kids or green eyed Asian kids well in comes CPS to take your kids for their “safety”, so they can be prescribed drugs maybe catch a STD while under their “care”…if your lucky, otherwise they will “runaway” aboard a CIA plane to Saudi Arabia to be a sex slave…because CPS found something “offensive” in your house like an NRA sticker or maybe your a prepper with 3 days of food or even worse…you home school!

    • Carol September 18, 2013, 7:41 pm

      JJ Says “Everyone else, just rents from Uncle Sam!”

      John who owns their homes now? Anyone? You are a tenent on your “own” land and have to pay US inc their rent or they will kick you off THEIR land and take your home and sell it. No one owns their land any more everyone now just rents from Uncle Sam!

    • Craig September 18, 2013, 10:31 pm

      I forgot add that the property tax is how they will drive people to be renters to the Gov. Your correct you son not own your house the Counties do but that’s why they convinced the counties to get in debt so the Gov can bail them out later with strings attached….giving up their soveriegnty and raising your taxes.

    • Rich September 22, 2013, 11:40 pm

      Already the financial model for UK Housing Councils

  • John Jay September 17, 2013, 4:14 pm

    Mario,

    I think you can swap the 70% that are doing well in the USA for 30%
    76% of Americans are living paycheck to paycheck.
    46% of Americans have less than $800 in savings to handle an emergency.
    http://tinyurl.com/mcdt7qj
    You get similar numbers if you research what Americans in their 50s have saved for retirement.
    Financially, they are an accident waiting to happen.

    You are right about the underground economy, but all the NSA type government spying means the day is fast approaching when that won’t escape the taxman.
    They have not yet eliminated cash only to keep the illegal drug trade alive.
    Legalize pot and suddenly they can track and tax that economy.
    And eliminate cash.

    Pretty easy for Uncle Sam to track everything sold on eBay and see if you declare it on your 1040.
    It is just a question of how petty they will get about it.
    Same thing goes for underground contractors.
    Pretty easy to track who is buying way too much building material at Home Depot/Lowes for a guy with no declared income.
    I am sure those plans are already in the works in DC.
    The date is being collected, all they need to do is sort it properly.
    As Gordon Liddy so aptly said about the Feds:
    They wantcha, they gotcha!

    It’s all closing in.
    We are being herded into a Feudal Society, where you may be legal to rise above your station, but good luck pulling it off.
    I foresee a nation of part-time jobs with no benefits, where you wait in long lines for marginal healthcare, and any rise in wages for a particular jobs triggers a flood of H1B applicants.
    And everything you buy and sell, all your electronic transactions, everything you do, everywhere you go is tracked by Uncle Sam.
    And taxed accordingly.
    Except for the Oligarchs and High Government Lords.
    They are, of course, exempt.
    Of course!

    • redwilldanaher September 17, 2013, 4:26 pm

      Damn straight!

    • Cam Fitzgerald September 17, 2013, 5:14 pm

      Nice post John Jay. It is perfectly concievable that the day will arrive when no attempt whatsoever will be made to hide or disguise the data collection capabilites of the government though.

      At the moment it is all shrieks of horror and disgust from some quarters about the invasion of privacy but lets imagine the powers-that-be just turn that on its head and make a frontal assault on those doing the complaining.

      On that date there will be just a simple acknowledgment that the ball really is in the court of those who hold the keys to the information most people assume is private or should be exempt from deeper analysis as no further denials are issued.

      Everyone assumes that all the invasive information collection efforts are simply designed to enhance existing data needed for tax purposes but I think that is just one aspect of what is really happening behind the scenes.

      The real purpose of course is to determine eligibility for benefits. The biggest drain on the expenditure side of the equation of the US government comes from the wide range of social programs and benefits that are being paid out.

      That is where the leakage in the system is taking place. That is where the holes need to be patched over to cut the deficit. Tax collections from those recieving any of the variety of government benefits is peanuts compared to the amounts actually paid out.

      So while the regular tax paying public may fear over increases in their bills come the tax season it is actually those earning undeclared income while living off the largesse of the state that need to be most fearful.

      Social security, welfare, pensions, unemployment benefits and a wide array of other safety net programs including food stamps represent an enormous cost to the taxpayer. Locating those who are in receipt of benefits based on declarations that later turn out to be fraudulent is a task easily sorted by computing the vast pool of information now at the governments disposal.

      From the point that we are actually told that these systems in fact exist (and will be actively used) and that they are being implemented to protect taxpayers from those living illicitly off the disbursements offered by the various programs the whole ballgame will change.

      Divide and conquer. Workers versus welfare recipients. A system of privacy invasion that is currently viewed with disgust by some will suddenly be supported by the majority of the population. Especially if they are feeling pressured by rising taxes and the burden of supporting their fellow citizen.

      The formula for legitimizing the work of the NSA and other organizations is so simple it really should keep people awake at night.

    • mario cavolo September 19, 2013, 12:51 am

      Yep guys, hate to agree that we can see “data” control coming more and more. I’ve been watching a futuristic TV series called Charlie Jade…everything is tracked, everyone’s hands are tied, can’t do this or that without big brother watching…we obvioulsy see the governments headed in that direction more and more…will they eventually ban cash?…even that IS happening, with more and more companies offering products and services with their “we don’t accept cash because its inconvenient to how we do business” policies.

      Cheers, Mario

    • mario cavolo September 19, 2013, 1:33 am

      …adding…having a bird’s eye view from here makes the macro juxtaposition even clearer; we have China in a macro trend moving more and more toward individualism, toward market-driven strategies & capitalism (very much to the overall benefit of the country’s citizens) while we have have the U.S. moving more and more toward nationalization/socialism of private life (very much to the detriment of the former secure middle class who must rely increasingly more and more on the govt’s system they don’t want to have to rely on, but very much to the benefit of those who are inside the benefits of the rising tide of socialism.

      Problem is there is no way this can turn out well in the long run. Eg, national healthcare in America for example is an impossibility because the health care/insurance/medical provider ponzi scheme system is already too far gone. When the national health care systems in Australia, Europe, Canada were originally implemented, costs were reasonable and so the numbers made sense. But now in the U.S. with all types of medical providers charging outrageous rates. Its a nightmare trap for the common man.

      I’m not trying to be cute when I ask specifically how the Fed buying $80 billion of bonds and mortgage-backed securities supports the growth of the U.S. economic society? That’s a TRILLION freakin’ dollars per year! Inject that much money directly in to the society where the real people live and work and what would be the result? Geez…I think I’m guilty of ranting…

      Cheers, Mario

  • Cam Fitzgerald September 17, 2013, 1:00 pm

    This was a great question you posed this week, Rick. Now is the time to think seriously about what we all want achieved with regard to future monetary policy actions and how that may lead to constructive solutions that will promote economic growth while contending with the changes in status amongst the deeloping economies now champing at our heels. My thoughts follow on what I view as some of the issues the next Fed Chair will contend with:

    First off, one thing I am noting now is that there is a conflict that has arisen between the desires of the President and what is the current stated policy objectives of the Federal Reserve. This may be the reason Mr Bernanke’s term was not renewed and a replacement candidate sought. Let me explain.

    President Obama has recently noted that in choosing a new Fed Chairman he had three goals in mind. These were a strong dollar, low inflation and sound monetary policy.

    Clearly these are at odds with the current Federal Reserve targets of higher inflation which essentially amounts to a weaker dollar in a low rate environment. Indeed, Bernanke did state that higher inflation was desired and this is ostensibly because of the risk of a deflation spiral setting in.

    So the new Fed chair must reconcile him/herself to the political will that sees a strong dollar as more beneficial to American economic dominance versus a Fed desire to artificially instill inflationary pressures to ramp up the economy at a time when it threatens to backslide into resession or worse.

    Most of us can probably agree that all sides demand inflation growth at 2% or above but what I refer to here is the difference between deliberate steps taken to increase inflation via monetary changes versus that which is organically induced through genuine growth pressures. There is a difference here as one leads to cost-push while the other evolves out of real demand that reduces excess capacity and should lead to a rise in average incomes.

    The Feds role as we know is to promote the goals of maximum employment, encourage stable prices and to moderate long-term interest rates.

    They therefore target inflation numbers from both below and above (as the saying goes) desiring neither high inflation nor low inflation as an outcome. A deliberate shift to a strong dollar policy thus throws some cold water on the QE process and comes into direct conflict with the Feds dual mandate that has been in place for the past 40 years.

    So are the winds of politics now attempting to revise that mandate to better suit the goals of the Oval office and the Treasury? Recently there has been talk suggesting that an empowered buck would result in lower oil prices thus (perhaps) emasculating the economic base of Russia’s Vladmir Putin while simultaneously pressuring Iran and depriving it of the prime source of it’s revenues. Both of those countries are highly reliant on oil revenues to fund their economies.

    A secondary outcome would be that energy costs in America would fall (more than elsewhere) thus providing an indirect stimulus to an economy that now appears to be back in growth mode and has shown some incipient signs of strength.

    This idea is given added impetus with the advent of the United States approaching a time when it, in combination with Canadian energy sales via pipeline, will be the worlds dominant oil producer and exporter. We cannot ignore the geopolitical significance of this recent and evolving change where the crucial area of energy is concerned.

    The political desire to deliver a one-two punch to Russia and Iran while boosting US economic peformance based on energy inputs is compelling and seems to point to a return to the ideas of strengthening global US energy hegemony and strength through dollar targetting while weakening political competitors and opponents. The Fed is of course cognizant of these goals but it is not clear they are mandated to modify their own policy to accomodate the will of the political sphere.

    The problem I see here is that monetary policy as envisioned by Ben Bernanke designed to evade the demographically induced deflationary headwinds brought on by a society in the act of deleveraging is now entirely at odds with the more complex and perplexing globally oriented political agendas.

    Many of us have believed in the past that the Fed was operating on a system that involved a vast number of economic variables to guide their decision making. They must surely study the myriad charts and graphs as diligently as everyone in the blogosphere does! I would counter though that the system they use to operate from is rather simplistic.

    It amounts to little more than projecting into the future a combination of interest rates, inflation numbers and employment targets with the last item being the least of considerations and used primarily as a marker to determine when to shut off the exceptional bond buying program.

    So here we have recently heard Ben Bernanke suggest both that a low rate environment will persisit for an extended period of time and that there is simultaneously a desire to increase the rate of inflation (which thus weakens the dollar). This may be an urgent issue. He is clearly serious on this point as well. Some have already concluded that the business cycle is going to naturally dictate a recession evolving in the near term despite what past efforts have already been taken to induce growth and support asset prices.

    The problem may be that the efforts just took too long to deliver results and so we have bridged the gap between recessionary episodes without ever having broken free of the last crisis and arrived back where we started.

    We hardly need much time to consider how these two goals of intervention will create conflict on their own given the historical relationships between interest rates and inflation. Needless to say there are doubts both can be achieved as envisioned without a lot of explanations being demanded if growth does indeed pick up as others are now projecting. That is to say that as inflation rises to defeat the level of indebtedness that complexities will come to the fore if rates remain low for too long.

    Neither should we forget though that upon the appointment of Jack Lew, Secretary of the Treasury, that he made the following comments in support of the Presidents agenda:

    “Treasury has had a longstanding provision through administrations of both parties that a strong dollar is in the best interests of promoting U.S. growth, productivity and competitiveness,” ~~ Jack Lew.

    Does that sound to you like an endorsement of Ben Bernanke’s expressed desire to raise the rate of inflation in a low rate environment? I don’t think so. The pressure to taper is clearly emanating from the Treasury and elsewhere.

    So what is really going on here behind the scenes? I am honestly left wondering if Janet Yellen really has any real hope of becoming the next Fed Chair with these considerations in mind. Her appointment will effectively amount to a confirmation of a set of past policies that are running at odds with the agenda of the President and that of Treasury. Are a strong dollar and higher inflation targetting even possible beyond a certain point? Can we put the Genie back in the bottle if inflation is deliberately unleashed? How can rates possibly stay low if such a course is plotted and engineered?

    Without labouring the obvious, it strikes me that we cannot have both a strong dollar policy as a prime objective and the current programme of Quantitative Easing in place simultaneously in order to arrive at the outcomes that are desired by both interests.

    Mr Obama’s objective must therefore lead to a tightening cycle as stimulus is withdrawn and most likely this is the source of the Fed’s recent commentary suggesting withdrawal on a phased basis which would be an answer to demands from other quarters that prefer the dollar strengthen for reasons that don’t quite mesh with the Fed’s dual mandate. And yet, withdrawal of stimulus is not exactly the same as “tight money” especially since most of the excess reserves were never released in the first place and more particularly since the Fed is insistant rates will remain low. But can they?

    This is an interesting dilemma.

    So what is my advice to Janet Yellen if she is appointed as the next Fed Chairwoman? It would be this: Be prepared to come under a hell of a lot of pressure and make concessions that violate everything you know and understand about running monetary policy. Be prepared to make steep concessions to a political agenda that conflicts with monetary policy as we know it. Or in other words, don’t take the job without expecting to be frustrated by dualing agendas rather than dual mandates.

    Fo the record my vote for Fed Chair is the outsider not even considered to have a winning chance and that would be the past Governor of the Bank of Israel and an outstanding candidate to negotiate the shark infested waters of policy that will be faced by the next Chairman of the Federal Reserve.

    His name is Stanley Fischer of course and it is my contention he is ably qualified for the position as the winds of politics drive a new thinking behind what the Fed can do to achieve the best mix of solutions in the difficult environment that lies ahead.

    Janet Yellen need not apply. From Washington’s perspective she represents the current staus quo which is no longer in tune with the evolving dramas on the global stage. Same old, same old. Paddy Power needs to adjust their bookmaking. They got this one wrong on the odds.

    • Cam Fitzgerald September 18, 2013, 8:34 pm

      So the strong dollar policy just got squashed. If there was a difference in the ideas of direction between the Administration, Treasury and the Fed we just got our answer about who has the most weight in this boxing ring.

    • Rich September 22, 2013, 11:31 pm

      Well writ Cam
      Will just add that the real 1980 methodology CPI is +9.1% and 1990 methodology not far behind

      Both attempts to reduce COLA payments

      http://www.shadowstats.com/alternate_data/inflation-charts

  • BKL September 17, 2013, 12:32 pm

    Pat is the proverbial canary in the coalmine. It has been a long time since we heard someone talk that way, without the least hint of sarcasm(Could be wrong about that). TPTB have succeeded in planting the seed of boundless optimism in at least a few minds.

    It will be interesting to see how that seedling handles stampedes.

    • Craig September 17, 2013, 5:19 pm

      Yep JJ.

      That is the road to muddle class ruin, exactly stated. New World Order (it’s really old world order, return to feudalism with the chains of technology). Everyone is sitting in the trap and only a few are debating if the trap exists instead of joining hands and running out of the trap.

      The FEMA camps will be for gun owners, the homeless and tax evaders (ie people that barter goods and services instead of using the “currency system”).

      You think the IRS (tax collectors for the Fed Reserve) is brutal now…just wait. How petty will they get, depends on how many unemployed Garys they can find that will be jealious of anyone with forethought or actual assets and income.

  • Dave September 17, 2013, 1:05 am

    “But based on that picture I would say she is very qualified…she has that goblin look of all the greats recently….very Hillary, Janet Napolitano, Janet Reno and Kagan-esk….”

    Gee, maybe she’s also a closet lipstick-less lesbian like that Gang of Four. She does teach in Berkeley…

    Whether Summers or Yellen, another Jew to scapegoat later on when the BIG one hits! Janet is a Brooklyn Jew, so expect she’s gonna be a-lot tougher than Bernanke though she’s been Northern California-ized.

    L’Shanah Tovah!

  • wesmouch September 16, 2013, 10:28 pm

    Yellen is spellin’ inflation. Run the printing press until the currency is kaput. This will allow the introduction of a “new” currency and further shearing of the sheeple. Continued inflation must finally end in the crack-up boom, the complete breakdown of the currency system. Deflationary policy is costly for the treasury and unpopular with the masses. But inflationary policy is a boon for the treasury and very popular with the ignorant. Practically, the danger of deflation is but slight and the danger of inflation tremendous.

    • BKL September 18, 2013, 3:48 pm

      Money is not printed into existence, it is borrowed into existence. Fed bubbles are designed to create borrowing demand. The people who trade the paper can skim off a fortune, but it’s not enough money to create inflation. For that kind of money, you need the masses to borrow money.

    • wesmouch September 20, 2013, 5:24 pm

      The Fed can and will produce inflation if it wants to. Sending $1 million to all citizens and even illegals will do the trick.

    • BKL September 21, 2013, 4:41 am

      I live in Japan. Will I still get my mill?

  • Sutton September 16, 2013, 9:33 pm

    “Didn’t see 2007-2008 coming” means ” had a hand in Making 2007-2008 occur.”

  • Jason S September 16, 2013, 8:58 pm

    My advice to her would be to damn the torpedos and one-up (or maybe more) Shinzo Abe. Since there is no political clout to right this ship nor large enough public outcry to inject some common sense, I say we go fatalistic and cheer her on to hasten our demise so we can begin to dig out of the nuclear option crater we are hell bent on creating.

    My hope is that the pain is severe enough to scare the crap out of people so that they will avoid this stupidness for a few generations at least. But my guess is that people will let the Govt. ride to the rescue some more. So I guess I will add to my advice to Ms. Yellen: funnel a lot of money to the States so they can build the share cropping facilities for all the indentured servants they are creating.

  • Craig September 16, 2013, 5:05 pm

    Rick….you are a very cruel man…how long did you have to look for such a horrible picture of the esteemed Mr. Summers??

    &&&&

    It is true, Craig, that I exercised an editorial bias in choosing that picture. But how many realized that the photo is not of Yellen, but of Rod Steiger effecting his Alice B. Toklas guise. RA

    • Craig September 16, 2013, 8:01 pm

      I was going to say you were reverting to your yellow journalism training. 🙂

      But based on that picture I would say she is very qualified…she has that goblin look of all the greats recently….very Hillary, Janet Napolitano, Janet Reno and Kagan-esk….

      &&&&&

      I cut my teeth in journalism in the 1970s under the late Bob Ebener, managing editor of The Atlantic City Press. He properly regarded all politicians as thieves, liars and cheats and would bridle at the avuncular term ‘city fathers’ when applied to officeholders, even ‘nice’ ones. He also felt that bridges, dams, highways, public buildings and such should be named not for the vainglorious jackasses who were in office when the projects were approved, but for the taxpayers who financed them. May Bob rest in peace.

      Incidentally, Alan Abelson, an M.E. whom I also worked for freelancing to Barron’s, was the last of the breed. RA

  • John Jay September 16, 2013, 4:51 pm

    The gap up in Treasuries and the Dow/S+P Sunday was the Oligarchs “Spiking the Ball” in the end zone!
    Touchdown!
    Funny to watch Oceans of free money slosh around in the FIRE economy while part time jobs with no benefits are the new normal for the serfs!

    Now the POTUS is going to speak about ‘Helping” the “Middle Class”!
    While he and Congress are pushing for Comprehensive Immigration Reform that will finish off what is left of the “Middle Class”!
    Is Mel Brooks writing the script for this?
    I wonder!

    • redwilldanaher September 16, 2013, 5:23 pm

      Exactly. This “recovery” is so pathetic that the FOX business clowns can even see through it. When the cheerleaders aren’t able to keep a straight face and tow the line, that should tell you something. There are more posters in this forum that want to ‘splain it all away than I’ve met over the past five years in real life. The ultimate test is the sheeple. Even they haven’t fallen for it because they know that it is entirely superficial and hasn’t included them. That’s pretty bad. Having said that, the syndicate only knows one thing, manipulation. I expect them to pour it on even thicker and as evidenced by the dotcom madness, it’s very difficult to believe in the present just how insane it can become in even the near future…

    • Craig September 16, 2013, 5:52 pm

      Question is thou….is this just the final bull trap or is it just another leg up with more legs up to come. Is this an inflation trap or will inflation push away deflation. I personally think this is just a delay until they can blame the broken economy on Iran/Syria. Since they can’t go to war now, delay the deflation and show the pretty girl to distract us. This may just further justify the big drop when they bomb someone outside the western banking system.

    • Cam Fitzgerald September 16, 2013, 8:05 pm

      Pretty girls and legs? Come on Craig! Did you see the picture? How old are you anyway!

    • Craig September 16, 2013, 8:14 pm

      I will type slower this time for you Cam…..the pretty girl is in reference to the pretty girl at a magicians show to keep your attention away from his hands. The pretty girl in my paragraph is the stock market not Mr. Yellen. By causing all the short sellers to get squeezed they are pushing the market above the pivot points which causes the machines and the buyers/shorters to do the rest of the work for them, then they can grandstand about how things have improved until they get their war going then can let the market forces loose to drive things down from the margin players (all a matter of time and manipulation ad margin is at an all time high) then pick up things on the cheap..ie high paying dividend defensive stocks and gold….anything else you need explained?

      $$$$$

      Unbeknownst to DaBoyz, their crude attempts at manipulation are very precisely ruled by Hidden Pivots, Craig, and when a pivot is breached, this simply brings into play the next. My current, dumbfoundingly bullish target for the E-Mini S&Ps is 1769.50, and my confidence that this number will be achieved will spare me agonizing over the whys and wherefores. I’d suggest that you watch closely to see whether 1769.50 not only gets the continuation of the bullish trend right, but also provides a short-able top.

      FYI, the last such target we used — to get short — was 1708.75, basis the September E-Mini S&P. The market actually topped on August 2 at 1705, then fell 75 points. This ultimately allowed us to establish an essentially riskless short position via DIA Sep 140-135 put spreads. Such plays are of course longshot bets in this runaway bull market, but because it costs us little or nothing to fade a bunch of imbeciles, we keep doing it, even as we take the long side of other trades — including one now in AMZN. RA

    • Cam Fitzgerald September 16, 2013, 8:34 pm

      And I say “Scarlett Johansson for Fed Chair!”

      No seriously, Craig. You were onto something with the distraction of pretty girls and solutions for the economy. Slow typing won’t help me now.

    • mario cavolo September 17, 2013, 12:40 pm

      Hey JJ, very quick and easy to agree with you that there is no “middle class” in America, the trend has been going on for a decade plus with contributing factors mounting stronger not dissipating in their force. From a macro point of view, I’m looking at it as a “failed” experiment or project. Unfortunately real world people with real families are feeling the pain of it.

      The lower end of the society/income spectrum has become more and more marginalized. While again though I won’t hesitate to point out that the upper 70% group are doing very well and I think that’s the hidden strength in the system. Another point not covered in the media is that amongst the 100 million lower end folks, more and more are “exiting” the system into the cash economy, so for perhaps 20% of them, things aren’t as bad as they look on the official stats. This iis well reflected in the rise of the employment participation numbers. I think people in the U.S., forced out of self interest and disgust for their govt’s complete failure to have the overall harmony and interest of society as their main priority, are taking matters quietly into their own hands. Interesting developments…

      Cheers, Mario

  • redwilldanaher September 16, 2013, 4:02 pm

    Short but great piece Rick. I think you nearly “said” it all. Really, how much difference does one figure head puppet make vs. another? This is equivalent to electing a low level magician and rooting that they’ll be able to continue to fool you with tricks that you know in advance will be tired tricks. I am really enjoying how the captives are caught up in speculation. They can’t wait to see what unprosecuted criminal will rule over them from a criminal enterprise that IS the “law”. It is fascinating…

    • Troll September 18, 2013, 4:43 am

      Well, here’s where we agree . . . it doesn’t matter WHO the Fed chairman is nor what they said in the past. It doesn’t matter WHO is president, either (for all you Obama haters).

  • Phil September 16, 2013, 10:09 am

    New Fed Chief Yellen demands to be paid in Gold. No stinking paper dollars for her.

    • Pat September 16, 2013, 1:56 pm

      Do any of you guys really believe that it made ANY difference who became Fed chairman? Not one bit. The next Fed head would get his/her marching orders from Wall Street and Obama, and they both want more money printing and stock market wealth, and that’s exactly what’s going to happen. The market has AT LEAST 2 more years of big gains ahead of it. We could easily see Dow 20K at the end of Obama’s 2nd term.

      It has never been so easy to make money. Just get long and stay long ! Collect the dividends and relax. No need to be day trading and moving in and out of stocks. All you need to know is to BUY and HOLD. Don’t fight the Fed !! The Boyz are in control and will stay in control until THEY decide to change the game.

      Aaahhh, don’t you just love the stench of smoldering BEAR flesh in the morning ….?

      &&&&&&

      You have become so repetitive and insufferable that I’m cutting you off with this post. You might have at least troubled yourself to respond to some of the excellent, quite plausible ideas presented above. Instead, you have insinuated on the group your usual blowhard self, telling brazen lies about how supposedly easy it has been for you to make money. No one wants to hear it, so…adios. RA

  • Cam Fitzgerald September 16, 2013, 10:04 am

    So the Taper is off? Is that the implied message of Summers withdrawal and therefore bye-bye to Obama’s strong dollar policy? Strange turn of events although it might have been predictable as markets have been signalling no patience for the withdrawal and rates are up sharply as a result. Maybe time to lock in some of those gains. Bonds should rise now. Perhaps the guys who claimed stimulus and QE’s would NEVER end will be right after all. At least the QE’s won’t end until they simply cannot carry on anymore which means we could chart a policy that attempts to beat the debts to a bloody pile of rubble with rising inflation while the powers that be do their level best to crush interest rates in the background. Pretty good plan actually if they can pull it off although it will be impoverishing for most. I include everyone of significance on that list of PTB of course. From England to China to Japan and the US……we are all in this together. That means working in unison will pay dividends and yield solutions while screwing the outsiders. I know some will say that policy cannot dictate rates and only markets can set the trend but it would be a mistake to think that the combined forces of the key Central banks of the world working in unison won’t have any effect if they choose. So this could be the idea that is now in the works. Inflation gets deliberately pumped into the system in a low rate environment for the next half decade baffling everyone and effectively leveling a massive hidden tax on the people of the worlds wealthiest and most indebted nations…….sounds about right to me. Hell, even Bernanke had hinted at it when he said we needed more inflation. There is no doubt that can be arranged if the choice is made. Just free up some of those excess reserves, get the ball rolling on lending, end speculation in commodities which distorts emerging markets and pump the general economy full of money. Hooray! Big salary increases are on their way for all. I am putting it on my calendar.

    • Cam Fitzgerald September 16, 2013, 10:27 am

      You know, it is funny how you can watch markets day in and day out and miss the picture altogether. Then one day…..pow….you get that Eureka moment and know just what is coming next and why. I think we just arrived there. I have to give a hat-tip to the strategists who work behind the scenes on the message from up above. These guys (and gals) arranged a scenario through a wide range of media releases where they had almost everyone believing that Ben Bernanke would begin to taper in September of all months! Next up was October, the doomiest and gloomiest of all months for stock markets. That set the stage for huge bets on a big market correction as stocks and bonds digested the information. There is enough fuel there now to power markets substantially higher though so it was brilliantly played. Ben won’t taper! Hell no. Larry is out, Janet is in and October is going to be a great month squashing all the folks on the wrong side of the trade. It is genius really. And we only get two days to decide if that is the correct angle and play it for what it is worth before the moment of truth. Long S&P pre-Fed announcement. Pure genius.

    • mario cavolo September 16, 2013, 2:19 pm

      Seeing it the same Cam, “master planning for the good of the country”…don’t we wish that was their value system and manisfesto, and BTW noticing CORN recently sank down again…Cheers, Mario

    • Cam Fitzgerald September 16, 2013, 5:16 pm

      Glad you are seeing the same Mario. Last week this idea was most certainly not on my radar though. I was in fact convinced along with pretty much everyone that a taper was assured. I just cracked up when I read the news Summers was out of the race and then it dawned on me that the game had changed completely and I had been bamboozled. I mean, hells bells, I got a really good laugh out that one as it was so unexpected. Noted corn too by the way. It looks to be bottoming and I am keeping a close eye on crude too. Any thoughts it might start falling soon. Looks toppy to me.

    • mary September 17, 2013, 5:20 am

      Cam, agreed.

    • mario cavolo September 17, 2013, 3:49 pm

      I’m still believing crude should be going down to $85 but it simply ain’t cooperating…clueless 🙂 Mario

    • gary leibowitz September 17, 2013, 4:21 pm

      To all the non-believers I say they taper and very soon. It is not only common sense but logical considering everyone knows they can’t keep this up forever. Baby steps. Do you think the Fed doesn’t understand the ramifications of making this a permanent solution?

      The cynics always assumed the talk on tapering was just a means to widen the yield spread. I suppose once they start to taper the cynics will once again find a reason why it is all a hoax.

    • Cam Fitzgerald September 17, 2013, 7:06 pm

      That is the problem, Gary. It is NOT logical right now given the poor history of equity markets for September and October. Why magnify what many consider to be a seasonal time of stock market weakness and declines? Does that not strike you as a stupid mistake? Lets not imagine they have not thought this through. That is what I was referring to above. Why would the Fed support stocks all these years and then shoot themselves in the foot and torpedo that effort at exactly THIS time of year? Makes no sense at all and therefore it will not happen. The media blitz including endorsements of three Fed presidents on tapering has led most to believe we are “taper-on”. I really doubt it. We have 24 hours until we find out one way or another but dimes to donuts they carry on with the exisiting program with the caveat withdrawal will happen once certain conditions are met.

      PS: Mario…..you watching crude? The technicals just lined up for a fall. Catch it while you can.

    • gary leibowitz September 18, 2013, 12:53 am

      Cam, I agree that these can be the worse most volatile months, but they have already telegraphed their move. The street already expects it to happen. Priced in. Is the data bad enough to delay the taper? We shall see. The majority is looking for the 85 number to appear.

      Either this month or next. Would need petty bad numbers to prevent this from happening. If we do get bad numbers nothing will prevent the stock market from tanking.

    • Cam Fitzgerald September 18, 2013, 8:12 pm

      And there you have it Gary. No taper.

    • Cam Fitzgerald September 18, 2013, 8:24 pm

      Well played, Mr Bernanke. Well played.

    • gary leibowitz September 18, 2013, 8:45 pm

      Cam, you were right. Looks like this next month will also not see a taper. If the data holds up or continues to show strength however we will see a tapering. I still say it will happen this year. The 10 year note didn’t drop by much. It is now only a matter of timing the start of the taper. It will happen.

    • Cam Fitzgerald September 18, 2013, 11:31 pm

      Thanks Gary. But I was dead wrong on Crude although I did write a long post explaining what I saw as the two differing viewpoints on the economy….Fed versus the Administration. My contention is that Obama and team would prefer oil prices drop to spur economic activity and this would be offset by a rise in the dollar. The Feds contention might be that higher oil prices will lead to inducing some inflation and that the dollar should weaken a little. So it was decided…..inflation; here we come (even if it has to be force fed like broccoli to a 6 year old!). And lo and behold, crude shot up along with equities, bonds and gold while the dollar got monkey-hammered to a withering bloody pile of pulp. Shows who really calls the shots around here. If the administration wants to do its part on the economy they will have to work on taxes, social benefits and other programs instead of doing a macro on Crude, Corn and the dollar. Speaking of which….I now feel far more confident corn is about to take off to give us all that warm inflationary feel all over again……..in about 3, 2, 1……..

      Well, maybe tomorrow. We will see.

    • mario cavolo September 19, 2013, 12:45 am

      Morning Cam (Shanghai time) …..seems the rising global tide of sovereign debt floats all boats including crude. So much for what “looked like” another proper short there…Cheers, Mario

  • Rich September 16, 2013, 7:40 am

    No advice for Ms Yellen except to let her hair down and keep the pedal to the metal for $500 silver

  • dec September 16, 2013, 7:29 am

    It’s rather astounding how the control is populated by so many who “didn’t see it coming”, and how those blind to obvious laws of nature continue to stay in control.
    I suspect the ultimate value of a vanishing quantity – that being trust in the system, it’s store of value and medium of exchange – will never be reached in our lifetimes.

    But we will see a turning to alternative means
    become accepted, despite efforts to hold it all together.
    It’s already happening. See how China conducts commerce in Africa and with Iran. The world is more powerful than the contrived construct of the Fed.
    Name one corrupt empire that hasn’t crumbled under its own weight.

    “Things fall apart, the central bank cannot hold,”
    (with apologies to Yeats)

    I’m excited for the coming dislocation, freedom and creativity. We’ve been through all this before. Read Antal Fekete, Kuntsler, Max Keiser and the burgeoning
    community of pioneers unafraid of the new. Exciting times and profound shifts, not without some discomfort,
    will inevitably lead to a reset. Eventually. In the mean time most of us will get something to eat and find a dry place to sleep.

    T’was ever thus.

    • Carol September 16, 2013, 2:24 pm

      They can all honestly and with a straight face say “who “didn’t see it coming” because one doesnt see what one creates! They created it so they didn’t Have to See it!

    • Carol September 16, 2013, 2:26 pm

      I mean really have you seen and read the “End Game” memo that has been circulating the net? Summers was part of the team that decided to “take down = ie end game – the system.

  • Joseph September 16, 2013, 6:48 am

    “They are never going to raise interest rates, they are never going to stop buying worthless MBS paper and US Treasuries.” When I see the word never used to describe markets it makes one think of the Titanic, the ship that would never sink. No matter what the Fed wants, rates are going up, the market will eventually win.

    • gary leibowitz September 16, 2013, 7:33 am

      She is the most qualified, and warned of impending crisis in 07. Sounds pretty darn impressive to me.

      &&&&&

      Most of the people who post here warned of the impending crisis long before Yellen did, and they didn’t mince words as she surely must have. Hell, probably half of the forum regulars would be better qualified than Yellin to run the Fed. As for running the country, I’d take someone randomly selected from a phone book over the President we’ve got, since it would be hard to find someone LESS qualified. RA

    • redwilldanaher September 16, 2013, 4:48 pm

      What crisis? Have you taken your eyes off corportate profits? Does anyting else matter? I thought corporate profits were the alpha and the omega…

    • Rich September 16, 2013, 5:28 pm

      John P. Hussman ‏@hussmanjp3m

      Yellin 2005: “If the housing bubble were to deflate, would its effects on the economy be large? No.”

      John P. Hussman ‏@hussmanjp36s

      Yellin July 2007 just before hell broke loose: “One reason that risk premiums may be low is precisely because the environment is less risky”

      &&&&&

      Thanks for helping confirm what we should have suspected of Yellin from the first. Leave it to Gary to try and end-run this critical indictment of her judgment. RA

    • Craig September 16, 2013, 5:33 pm

      All of the stooges can’t all vote or say the same thing 100%….SOMEONE has to have creditability for the next scam/con. Or they just turn someone that has credibility like Anakin Skywalker (aka Greenspan) although I don’t think we will ever see Vader (Greenspan) throw the Emperor off the bridge.

    • gary leibowitz September 16, 2013, 10:24 pm

      “Janet Yellen has all of the right qualifications: two top-flight economics degrees, work as a tenured professor at University of California at Berkeley, head of the Council of Economic Advisors, six years as head of the Federal Reserve Bank of San Francisco, four years as a voting member of the Federal Reserve’s Open Market Committee and three years as vice chairwoman of the entire Federal Reserve System. The Wall Street Journal recently scored 14 Fed policymakers on 700 predictions they made on growth, jobs and inflation during the tumultuous period from 2009 to 2012. According to the report, the “most accurate forecasts overall came from Ms. Yellen.” Furthermore, Fed minutes have revealed that Yellen was one of the only top Fed policy makers who warned about the housing bubble before the crisis. ”

      I guess the NY Times opinion page just got it wrong on the details. As for the Wall Street Journal they too must have screwed up on the facts.

      I do believe you all threw up your hands 5 years ago. Would have done a whole lot of good if we actually worked for a solution in that time instead of assuming all was lost. Coulda, woulda, shoulda.

      Destructive arguments verses constructive ones. Why bother repeating yourselves with the same doom/gloom message. I am always accused of chiming in with a decidedly over-slanted message that all is not lost, or that we can work it out.

      You all dismiss that any good can be done on all topics relating to this economy and prefer to give a litany of reasons why. No wonder Copernicus and Galileo lost out for centuries. You start out with an assumed absolute truth and work every argument from that base. Not a good way to analyze a situation if you ask me.

      So I must throw out the argument that you all are just too repetitive with absolutely nothing to say or contribute. If you think I am fabricating my case please bring up any random RICK’s PICKs and see for yourselves.

      I find it funny that from my perspective there hasn’t been any real discussion going on, only a cheerleading sounding board for all your frustrations. Easy to stand on a street corner and proclaim the end is near. Much harder to call up facts, conjecture based on trend, or even an hypothesis that can be tested.

    • Jason S September 17, 2013, 4:58 pm

      Gary, here is a quote from the NYT:

      Ms. Yellen told the Financial Crisis Inquiry Commission in 2010 that she and other San Francisco Fed officials pressed Washington for new guidance, sharing the problems they were seeing. But Ms. Yellen did not raise those concerns publicly, and she said that she had not explored the San Francisco Fed’s ability to act unilaterally, taking the view that it had to do what Washington said.

      “For my own part,” Ms. Yellen said, “I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.” Her startled interviewers noted that almost none of the officials who testified had offered a similar acknowledgment of an almost universal failure.

      So even if she saw problems she did nothing. She is just what we need, another spineless Washington flunky in charge of our money. Oh, she also now believes we need greater regulation. This coming from a regulator who chose to do nothing, ie. asleep at the wheel. So rather than leave the regulation alone and put competent people in charge we will promote the idiots who showed incompetence and write more regulations they will continue to ignore.

      Why do you continue to support this crap, Gary?

    • gary leibowitz September 18, 2013, 12:18 am

      http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/16/janet-yellen-called-the-housing-bust-and-has-been-mostly-right-on-jobs-does-she-have-what-it-takes-to-lead-the-fed/

      Got to love those selective FOX style snippets to convince you she is not qualified and had no concerns prior to the crash. In 2005 no one saw it coming. In 2005 the bundled toxic mortgages were in it’s infancy. In 2007 however BEFORE the crisis took off she did notice what the potential problems could be. Rewrite history all you want but please come up with ONE person you feel would better be able to direct the Fed.

      If this article, and many like it, are wrong please show me where? I love it when people search the archives to come up with a very slanted and bias view.

      I bet not one single person here warned of an impending mortgage implosion in 2005. Did anyone even know what was going on with the toxic bundle scheme?

      I can count on people here to always, I mean always find fault with anything associated with this administration. You remind me of the law clerks working for one of the Supreme Court Judges. Their job was to find precedence or constitutional interpretations to back their stance. First make a stand and then find reasons to defend it. I would rather gather facts and let “it” lead me to a conclusion. While it is hard to separate personal opinion when doing research, you have to constantly question your own bias and inclination, and let the cumulated facts determine the outcome.

      I am sure this is not the end of it. I guess the snippets win. She is not qualified, went along with the male gang, and never questioned the establishment.

      Since I am clearly a government insider, I guess I can accuse most here as being political writers for the FOX organization.

    • Jason S September 18, 2013, 1:04 am

      Gary, as I stated, the statements from Yellen and the quote was from your beloved NYT, not a Fox affiliate:

      http://www.nytimes.com/2013/08/14/business/economy/careers-of-2-fed-contenders-reveal-little-on-regulatory-approach.html

      Page 3, paragraphs 6 and 7.

    • Jason S September 18, 2013, 1:12 am

      As far as reasonable alternatives to Yellen:

      Tom Hoenig, ex-president of the KC Fed
      Richard Fisher, current president of the Dallas Fed
      Ron Paul, Congressman

      Preference is in order

    • VegasBob September 21, 2013, 8:02 am

      gary liebowitz,

      I voted for Obama in 2008. The hope and change was nothing but more of the same as we had under Bush the Dumber. I saw through all the Democrats’ lies and voted 3rd party in 2012.

      I will never vote for a Republican as long as that party stays stuck on god, guns, gays and abortion.

      But, in my humble opinion, Barack Obama is just a run of the mill schmuck who imagines that he is far more intelligent than he actually is. I pity all the toadies and sycophants who can’t see through all the b.s.

  • John Jay September 16, 2013, 6:24 am

    It’s not as if the Fed will be considering multiple options depending on who is nominated to be Fed Chief!
    They are never going to raise interest rates, they are never going to stop buying worthless MBS paper and US Treasuries.
    Because the Matrix will flicker and go black if they raise rates or stop buying all that worthless paper.
    And they are not going to let that happen.
    TPTB are never going to give up the wealth, power, and tyranny they have spent the last 100 years accumulating.

    Both Houses of Congress might just as well exchange their $2,000 suits for the DHS Blue Shirt and Sam Browne Belt, with the optional cross belt accessory!
    They will eagerly vote for anything put before them, without even a quick look at the content.
    And as more and more Americans slide into destitution it will serve only as a source of amusement for our new Feudal Overlords.
    Everything that has happened to loot us of our wealth and freedoms since 1963 has not been an unlucky series of unrelated legislation.
    It was and always will be POLICY!

    Nothing is going to change for the better, no matter who is Fed Chief or CJCS of the Military, or your Congressman or Senator.
    So all you can do is stay out of trouble with the Sheriff of Nottingham, don’t poach the King’s Deer, and make what money you can so you have some options open to you as things get worse.
    I have come to accept the reality that I see all around me.
    Your reality may differ from mine, but that is no reason for us to get in a shouting match over it.
    Whatever works for you is the right thing for you!

    • VegasBob September 16, 2013, 6:41 am

      Ms. Yellen does not have sufficient intellectual honesty to do the world a favor and simply commit harakiri.

      So I fear that John Jay has nailed it.

    • Don September 16, 2013, 3:31 pm

      Kudos to John Jay;
      hits the bulls eye again. I wholeheartedly agree with your summation. If people will only look http://www.usdebtclock.org/
      It will tell one all they need to know that the tide is rising, rapidly.
      Best to you.
      Don

    • Craig September 16, 2013, 5:27 pm

      The energy page is fascinating on the debt clock, I recently discovered it there. Especially if you are awake to all the propaganda and lies about energy/global warm/change/cooling (whatever they’re calling it these days).

    • DK September 16, 2013, 6:33 pm

      JohnJay,
      You ‘da man.’

      More fantastic commentary, Rick. I truly enjoy your stoking the flames of discussion and debate. Bravo.

    • BDTR September 16, 2013, 10:28 pm

      Here’s the actual reason that Summers ‘withdrew’.

      http://www.youtube.com/watch?v=ogc-LRWByhY

      Again, you’ll never hear, see or read this anywhere in MSM, certainly no DoJ or congressional banking committee investigation nor likely a ban of this sociopath from continuing to influence and profit from his crimes against humanity.

      There’s a deep, dark snakepit waiting for Summers somewhere in Hell.


Do you want up-to-the-minute technical analysis and forecasts for your favorite stocks, commodities, ETFs? Join our Take Request Session on October 6th!

No, I'm not Interested

Do you want up-to-the-minute technical analysis and forecasts for your favorite stocks, commodities, ETFs? Join our Take Request Session on September 15th!

No, I'm not Interested