Beware Chattering Fed Asshats, Here's Why
WSJ's Real Time Economics had an interesting piece the other day about our darling Fed representatives traditionally dodging any dollar-related questions and diverting them to the Treasury instead. Allegedly, it's the Treasury that has the ultimate authority over the dollar though actual dollars read "FEDERAL RESERVE NOTE" and Treasury has absolutely no control over all important dollar-related issues such as how many to print and how cheap to make them. Seems silly, doesn't it? It is.
In the piece, we get a lovely sampling of recent Fed asshat comments on their dollar assault of late, quite uncharacteristic from our traditionally tight-lipped friends at the Fed. Hey, they did pledge transparency, didn't they?
We’re not trying to push the dollar to any particular level,” Federal Reserve Bank of New York President William Dudley told CNBC Tuesday. “We don’t have a view about where … the dollar should go,” he said, in an interview that said overseas leaders should be grateful for the U.S. pursuing a policy that will return the nation to health.Wow!! Could it be? A new and improved, totally transparent, out-in-the-open Creature from Jekyll Island ready to expose its motives and be completely honest about its goals and how it plans to get there?
Newly installed Fed vice chair, Janet Yellen, told the Wall Street Journal this week the Fed isn’t trying “to push down the dollar” or to start a currency war, as some overseas officials have suggested.
Meanwhile, Boston Fed President Eric Rosengren said Wednesday that while the Fed isn’t trying to depress the dollar per se, textbook economics would suggest that “a modest currency depreciation is the normal consequence of easing monetary policy.” Minneapolis Fed President Narayana Kocherlakota said Thursday he doesn’t see “big effects” on the dollar from current Fed policy, in a speech where he offered support for the bond-buying program.
The Fed’s leader, Ben Bernanke, has also entered the fray. His highly anticipated address Friday punched back at international critics who think the central bank policy is an unfair manipulation of foreign exchange markets. Emerging economies like China, with its peg to the dollar, are pursuing a “strategy of currency undervaluation” that prevents a needed rebalancing of global economic variables, Bernanke said. If he can say other currencies need to rise in this way, it suggests he’s comfortable with a dollar drop.
Finally, a speech released Friday by the New York Fed’s international division chief noted in unusually specific terms that “the dollar has weakened of late, but as a side-effect of policy, not as a goal, and not by more than might be expected in light of our recent slowing and recent changes in interest rates and inflation expectations.”
Yeah right. Instead, what we have is a desperate central bank scared to death of how this will turn out (you cannot tell me a single one of them actually believe they'll be able to steer us out of this mess at this point and with things as dismally flat as they have been). This isn't transparency, it's a last ditch effort to convince us that they have control of the situation by exuding an air of transparency. You know, for our sake.
There's no bread but plenty of circus and this is only the beginning.
Have you ever seen a repentant sinner on his deathbed confessing his transgressions to whomever will listen? Yeah, it's like that.