A Letter To and From the Fed?
Zero Hedge has an interesting letter to one Zimbabwe Ben Bernanke from a concerned ZH reader and also includes this charming note to the Board of Governors which, strangely, comes with a response from the Board.
Call me crazy but there's something suspicious about the response, mostly the fact that it is highly unlike our friends at the Board to acknowledge anyone outside of their exclusive circle of economic demolition artists, let alone an average American concerned about the state of the economy. It is not their job to calm our fears, nor can I picture any of the Board's communication folks using big words like "noninflationary economic growth" and "how the economy is functioning."
Of all the things that smell wrong about this supposed response from the Board, it's this sentence that sits strangest in my gut: "However, they appreciate receiving observations and advice that bear on the Federal Reserve's responsibilities, particularly from people who have concerns about how the economy is functioning." The very last thing the Board is going to do is encourage people to communicate with them (otherwise JDA would have received a thank you note for the last two birthday cards she has sent Zimbabwe Ben but we aren't bitter or anything) by implying that they actually care what anyone has to say. That leaves the door wide open for more letters, more frustration, more expression of doubt in what the Almighty Fed is doing. And we all know they don't have time for that shit when they are occupied with drafting this exit strategy they still don't have and running 24 hour preventative maintenance on the printer.
And while we all know Dirty Fed operatives are sketchy (some of us know this more than others but I have no idea what you're talking about), it seems extra sketchy that this "response" is signed with initials and "Board Staff." Fed asshats have titles and like to flaunt them like big swinging central banker dicks slapping across your doubting little face (you know, like any professional would), it seems unlikely that some Board asshat would hide behind "Board Staff" and pass up the opportunity to teabag a Fed detractor with his actual title.
Sorry but I'm calling bullshit. If this is for real, the Board is doing an awful job of communicating by avoiding first names. That sort of behavior is usually reserved for seedy Internet trysts and Economist columns.
Dear Chairman Bernanke and Fed Board:
I am a centrist voter who supported President Obama but who also believes strongly in the need for fiscal responsibility. While I am not a financial expert, I do have an economics degree and understand fiscal and monetary policy issues better than most citizens.
Yesterday, on Monday, Aug 2nd, I watched the stock market go up over 2% despite a month of bad economic news. Today, there was even more bad news -- existing home sales, factory orders, consumer spending and personal incomes -- and yet the market is down only marginally. In any normal world, the market responds to fundamentals.
Yet, in the United States today it does not. The only reason the stock market (and other asset prices, e.g. housing) are supported at current levels is the perceived near certainty of further Federal Reserve intervention (aka "quantitative easing"). Speculation of further quantitative easing is clearly evident in the financial press (CNBC, WSJ, Bloomberg, etc.), and was exacerbated by Mr. Bullard last week. The Federal Reserve should not -- and ultimately cannot -- prevent markets from reaching equilibrium. This means asset prices must fall to match both declining personal and national incomes, which are the natural consequences of globalization (and misguided US trade policy) on US GDP relative to the rest of the world.
Therefore, the Fed should not manipulate markets in an attempt to make up for: 1) misguided deregulation (i.e. abandonment of Glass-Steagall during the Clinton Admin, made worse under the Bush Admin) 2) irresponsible, bubble-inducing easy money policies by the Fed under Greenspan 3) fiscal irresponsibility by the Congress 4) globalization While quantitative easing may have been necessary in late 2008-early 2009 to stabilize the economy, I am writing to implore you to please stop any discussion of further easing. Please have the courage to follow former Fed Chairman Volcker's example and let the economy go through a difficult adjustment period so it can have a REAL recovery.
And the Fed's response:
Dear Mr. [redacted]:
Thank you for your most recent correspondence to Chairman Bernanke and the Board members.
The Chairman and Board members receive a great number of letters daily. As public figures with many daily responsibilities, they are unable to reply to all of those letters personally or to acknowledge receipt of each correspondence. However, they appreciate receiving observations and advice that bear on the Federal Reserve's responsibilities, particularly from people who have concerns about how the economy is functioning.
Also please know that the Federal Reserve's monetary policy actions are not aimed at correcting or influencing any particular market. The goal of monetary policy is to foster conditions conducive to sustaining sound, noninflationary economic growth over time and policymakers must make decisions that provide the greatest benefit overall.
Again, thank you for taking the time to share your views.
Hey, at least it was a good letter.
Upon further investigation, however, it seems like this JPD character is really just the poor asshole who has to respond to the endless stream of comments coming into the Board's website. Maybe he (or she) is the Board's version of Watson, spewing out central bank trivia in response to interrogation by shmucks who manage to find the Fed's feedback form. Is this for real? Wonder if it has anything to do with the fact that the Fed is trying to play nice with the sheep by offering transparency and openness while it does its backdoor deals to securitize our Social Security numbers to China or whatever it is they're up to?
JPD, if you're out there, gimme a holler, I have some questions for you.