Morons Want QE 2 To Do More, Clever Fedheads Know It Will Do Less

As anyone who has ever read even 1% of this website knows, I could do without the Fed completely. If I had it my way, it wouldn't exist and we'd go back to a steady currency like wampum or goat intestines or whatever it was our ancestors used before some clever assholes decided paper meant money and took control of money as we know it.

Given that, we have the Fed. They aren't going anywhere (despite my best efforts, including but not limited to picketing the Board of Governors on my days off with informational flyers and Stop Bernanke bumper stickers) so the best we can do is recognize the rare voice of reason among the asshats blabbering about all of this being China's fault.

A Fed asshat endorsement from JDA should not be taken likely. I don't like them. I'd rather we didn't have any of them. So when I say I actually don't mind one or two of them, that should be read as an acknowledgment of these individuals' ability to cut through the bullshit and truly serve the best interests of American workers and businesses. That's allegedly the duty most Fed asshats are charged with, though I have to admit my faith in that system to work correctly has been more than tested of late.

Check out this dickhead Tim Duy (who I normally don't mind) ripping on my favorite Fedhead, who happens to be one of the few voices of reason remaining in a chorus of nutjobs who somehow think more free money will solve this. Smart move, brainiac! Fisher is one of the good guys, you tool!

The Wall Street Journal suggests the Fed is facing a policy conundrum. I would suggest that "conundrum" is an overstatement. Push comes to shove, there will be little debate - if the current oil price shock turns nasty, Fed officials will embrace another round of quantitative easing.

Dallas Federal Reserve President Richard Fisher offers the hawkish view, and remains colorful as always. Today he ranted against QE2:

To be sure, there are some, including me, who worry that the Fed ultimately may have taken out too much insurance against a double-dip recession and slippage into a deflationary spiral. There are some, including me, who argued against the last tranche of insurance we took out in committing to buy $600 billion in U.S. Treasuries between last November and the end of this coming June as we were simultaneously purchasing additional Treasuries to make up for the roll off in our mortgage-backed securities portfolio. There was a strong feeling among those of my policy persuasion that we had already sufficiently refilled the tanks holding the financial fuel businesses needed to drive their job-creating machines. They felt that by being too accommodative, we might run the risk of planting the seeds that could germinate into renewed volatility, speculation and inflation, or give comfort to a government that for far too many congressional cycles has fallen down on the job by spending and borrowing and committing to unfunded programs with reckless abandon.

Am I the only one who sees Fisher as a remarkably irresponsible policymaker? I get the sense that at best he is trying to undermine the effectiveness of monetary policy by repeatedly emphasizing that it doesn’t work. At worst, he is deliberately trying to feed inflation expectations, for what purpose I know not. I think the responsible policy approach would be to exude confidence in the Federal Reserve, particularly during period of turmoil. The policy is in play; no good comes from public derision at this junction. Simply reiterate that the Fed has the tools to remove the accommodation should it become necessary.

Goodness, if anyone took him seriously, he could do some real damage. Luckily, I think by now we have been trained to largely dismiss Fisher.

Did I read that correctly to say that Duy believes Fisher and other Fed policymakers should just totally bullshit their way through whatever is to come?

PLEASE! Isn't that how we got here in the first place? This can't be real, did he really just say that? If pessimistic, Fed-hating little JDA can be forced to see a bright spot in the dark heart of the Fed for what it is, why is it so difficult for others to get?

Let me tell you why I like Fisher (which I've told you before) and it's not just because I happen to have an awesome Dallas Fed Jr Deputy badge tattooed on my wrist (they held me down in their bunker and branded me, I swear). He is real about this shit. He gets that we're in a really impossible situation and that if we don't figure it out and quick, we're fucked and hard.

Some of our friends at the Board of Governors might not get that, sauntering through their marble temple and heading to Europe to speak about China's transgressions but Fisher has to put up with this shit every single day. Texas businesses bitching to him about how rough it is out there and how bad "Congressional nonfeasence" (JDA calls this "general jodiendo" and/or "bullshit") makes it for all of us trying to make a living, run a business or just get by.

The definition of nonfeasence
, for background purposes of course:

The non-performance of some act which ought to be performed.

When a legislative act requires a person to do a thing, its non feasance will subject the party to punishment; as, if a statute require the supervisors of the highways to repair such highways, the neglect to repair them may be punished.

Mere non-feasance does not imply malice; this is strongly exemplified in the case of a plaintiff, who, having issued a writ of capias against his debtor, afterwards received the debt, and neglected to countermand the writ, in consequence of which the defendant was afterwards arrested. On a suit brought by the former defendant against the former plaintiff, it was held that the law did not impose on the first plaintiff the duty of countermanding his writ. If he had refused to give the countermand when requested, it might have been evidence of malice, but in such case there would have been something beyond mere non-feasance, an actual refusal.

There is a difference between nonfeasance and misfeasance, or malfeasance.

Right. JDA calls that "fucking around" and wishes everyone would just stop. Everyone except Richard Fisher, who is actually doing his job. We should be grateful, not stupid.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


W.C. Varones said...

I have no idea who this Tim Duy guy is, but how cynical to suggest the Fed's job is to lie to people and tell them everything is OK.

That sounds like an admission that this whole monetization of perpetual 10% GDP deficits is a con game!

chairmanben said...

Pimco flagship bond fund sold to zero all its Treasuries holdings ahead of end of QE2.

The Fed's going to need a HUGE mattress to stuff all the printing.

Duy is right, bluffing will work (for about a day).