Federal Reserve Vice Chairman Janet Yellen is said to be President Barack Obama’s top choice to replace Helicopter Ben Bernanke at the Federal Reserve now that Lawrence Summers has taken his name out of consideration.
Progressives are said to be ecstatic, viewing Yellen as someone who will continue if not double down on Bernanke’s money printing policies. As usual, progressives are missing the point.
Regardless of who is placed at the head of the Fed, he or she will do the will of the banksters and Wall Street. He or she will continue to manipulate interest rates and print money, which causes inflation and malinvestment and steals the wealth of savers and devastates seniors. A perfect example of this is the market’s reaction to Bernanke’s speech Wednesday, which eliminated the prospect the Fed would back off its money printing.
Progressives claim Yellen accurately forecast the housing collapse. That’s not much of a resume enhancer and it’s also untrue. Zerohedge found a Yellen quote from The New York Times in which she admits she missed it.
For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.
That’s OK, Ms. Yellen, your boss never saw it coming either.
However, there are those of us who did. In March of 2002, I wrote in The Bob Livingston Letter (subscription required):
The Financial Crisis Builds! Where Are We Now?
The answer: Nowhere near the bottom! — many months even years to go! — out to 2004 — 2005 minimum!
Unbelievably, the fate of the U.S. economy still rests squarely on the preservation of grossly inflated stock values and ever more financial speculation. Both will collapse! Three bubbles still remain! Consumer spending, the real estate mania and the U.S. dollar.
In addition, consumer spending has not retrenched. We still are somewhere near the top of the real estate mania and the US dollar bubble. Only a veneer of hype and wide denial is between the markets and reality.
With these exceptions, history’s biggest economic and financial bubble has burst and the Fed can’t stop it. This strongly suggests what lies ahead — a crash and a liquidity trap. New wars won’t change this… The herding wave that brought on history’s greatest financial mania has reversed into a down or negative social mood that has or will erase all the paper profits in the stock market and real estate speculation.
And in December of 2006, I wrote:
Predictions for the Housing Bubble — It’s Not Good!
The U.S. housing market is the largest market in the world. You can imagine what economic madness lies ahead.
The housing bubble was created to burst. It is a mess and the whole world is holding its breath.
Hot air will not support anything but this is the foundation of the housing bubble.
What do I think? I think the Fed will create money with wild abandon. It will lower interest rates and out of nowhere 50- and 100-year mortgages will appear just like in Japan.
Deja vu all over again. Those millions of marginal mortgaged homeowners will flock to refinance to get lower payments and maybe some new cash. It will all seem like magic but it is only another deferral of doomsday.
Every financial trick is an illusion of prosperity and a put-off of the inevitable, but it feels good and it is here and now. Damn the future. We will worry about that tomorrow, like Scarlet O’Hara.
Regardless of who sits in the big chair, the decisions made there will be made to benefit the elites. The people will continue to suffer under the ongoing economic calamity.