Janet Yellen is a Useless Yes Man and the Fed is Still Blind
Jim Grant (Grant's Interest Rate Observer) showed up on Bloomberg and had some awfully interesting things to say. Most notably (via Wall St Pit):
“Janet Yellen has had 36 opportunities to vote on monetary policy at the Federal Open Market Committee and she has voted ‘Aye, yes’ 36 times. 36 for 36 times. Now, has the Fed been right 36 consecutive times? No. I think that Janet Yellen is a well credentialed, consensus-hugging economist straight out of the Fed HR department. She is ideal from the point of view of the Fed bureaucracy. She will make not one ripple.”
and then there's this:
“Deflation is a funny thing. It’s a word that is much in the news, much in the markets, but is all too infrequently to find. So the Fed says that deflation is broadly declining prices. But could not also be progress? In other words, if the world produces more at lower prices, is that so bad? Americans spend half of their weekends, it seems, looking for bargains.”That last line almost made me cry. I've said the same thing except "stupid asshats" doesn't have the same ring as "a lack of intellectual rigor and forthrightness."
“So the Fed is telling us that bargains galore is something that the Fed must resist with radical volumes of credit creation… I guess what I would ask the Fed is would it please stop and help us understand why this is bad? So in 2002 and 2003, Alan Greenspan, then chairman, and Ben Bernanke, then a newly fledged governor, were out giving speeches saying that deflation is a clear and present danger, and we must – they said at the Fed – must cut rates dramatically, which they did to 1 percent.”
“But the price indices today are much weaker than they were in 2003. So where is the Fed? Why not broach the topic of deflation again?”
“So what I blame the Fed for, among other things, is a lack of intellectual rigor and forthrightness.”