Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Yellen’s Oversight of the Fed Is Not Producing Monetary Policy but Disbelief

Interest-Rates / US Federal Reserve Bank Sep 22, 2016 - 10:49 AM GMT

By: Jeff_Berwick

Interest-Rates

The real product of the Fed these days is not monetary policy but disbelief. People can’t believe the amount of speculation, conversation and outright complexity that results in… nothing.

Yellen is basically presiding over the deflation of the Fed’s reputation. Every month more and more credibility leaks away.


And this month was no exception. For weeks leading up to the FOMC meeting on Wednesday, there were grim articles and interviews stating that a “hike” was possible if not probable.

And again nothing happened. I’m not surprised of course.

Since we started TDV, I’ve said that they’d never raise rates again (and have had people laughing at me for more than six years now for that stance.

But once again, I’m right. The Fed made no movements again. The 0.25% in December last year which nearly collapsed the world’s markets doesn’t really count because it was so tiny (and they’ve backed off it ever since).

Trump was also correct in regard to a rate hike. He said the Fed might raise in January, but not until then because a hike – and subsequent market volatility – might jeopardize the election for Killary.

But there are bigger issues involved here than accurate predictions. The larger issue is that the Federal Reserve is bleeding credibility like it has an open wound.

After the decision, Yellen tried to defend it by explaining that since the economy was improving so much she didn’t want to interfere.

What Yellen is good at is threatening rate hikes and not following through. The idea that the largest economy on earth has only tightened a mere 25 basis points over the last decade is beyond astonishing.

And with all of this paralysis, we’ve had the accompaniment of millions – billions – of complications as bureaucrats meet and industry leaders debate what’s coming next.

And nothing ever does. Just more talk. More articles. More interviews about infinitesimal monetary movements.

25 basis points – that’s been the center of discussion for nearly a decade. 25 basis points is hardly a baby step.

But for Yellen, it’s a chasm too far.

All she ever does is explain what she might do – and then she does nothing.

Just one more week, one more month, one more year – and the economy is bound to thunder aloft. But it never does.

She lost her credibility long ago. The US can’t afford a significant rate hike because the government owes too much money.  The US government has doubled its debt in just the last eight years alone, to now well over $19 trillion.

But that’s something else Yellen will never discuss. They’re scared to hike, even nine years into an alleged recovery. At all costs she intends to keep the tale alive.

The recovery is coming … it’s on its way … it’s almost here.

She’ll keep preaching this mantra as long as she has to. If she actually does raise rates significantly, fedgov obligations will soar while tax revenues collapse. The debt itself expands rapidly, leading inevitably to default.  And if you thought a country like Argentina defaulting could cause shockwaves across the world… you ain’t seen nothing yet if/when the US defaults.

And then Yellen has to explain the government’s default, which is a good deal more difficult than explaining month after month why she’s going to yank on rates NEXT month.

And gradually credibility trickles away. I stopped believing in central banking long ago. But many people are only waking up now. Every time Yellen fumbles in front of the podium for another month, more people start to question what the hell she is doing.

That’s the real product of these FOMC meetings: Disbelief and incredulity. Yellen has gone from a decision maker to an apologist. And I doubt very much that the Fed can recover at this point. She may not be the last Fed chair, but she’s certainly presiding over its collapse.

Meanwhile, we’ve predicted it all and have profited massively from it.  Our subscriber’s portfolio is up 200% in the last year.  And we are just sending out our latest newsletter today with much more info on what is coming next. It will show you how to survive and prosper via investments in precious metals and the mining sector as well as in cryptocurrencies and more!

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

© 2016 Copyright Jeff Berwick - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jeff Berwick Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in