Seven Fed presidents gave speeches this week. San Francisco Fed president Mary Daly provided the closing yap for the week.
Daly said the Fed is debating if balance sheet should be regular tool.
“In the financial crisis, in the aftermath of that when we were trying to help the economy, we engaged in these quantitative easing policies, and an important question is, should those always be in the tool kit — should you always have those at your ready — or should you think about those are only tools you use when you really hit the zero lower bound and you have no other things you can do,” Daly told reporters after a talk at the Bay Area Council Economic Institute.
“You could imagine executing policy with your interest rate as your primary tool and the balance sheet as a secondary tool, but one that you would use more readily,” she added. “That’s not decided yet, but it’s part of what we are discussing now.”
Image from She Dropped Out of High School. Now She’s President of the San Francisco Fed.
In Control Not
This discussion is further admission that
- The Fed is not in control
- The Fed seeks to manipulate and placate the markets
Any sensible person already understood that.
Autopilot In Reverse
In December, the Fed Chair Jerome Powell said the Fed was on “autopilot” for QE reduction. Following a market taper-tantrum, Powell reversed course.
Today, the truth comes out: If the market throws a tantrum, the Fed will listen.
Related: Damn, That’s a Lot of Speeches
Mike “Mish” Shedlock
With the US labour market in shambles and unemployment horrifically high, dramatically more QE is required. This time they should definitely not buy crappy assets like mortgage bonds or US treasuries, but actually buy assets that have an applicability to strategic production and supply chains.
The problem is there are 210M adults to quell in the US. As populations rise more central control of the economy takes place.
Only when the population consist of is nothing but a bunch of useless sheeple. There are plenty more Muzzies than 210 million, and Arab Spring, not to mention Somalia, the rise of ISIS and other happenings, was about anything other than increasing central control. Kind of sad that once free Americans, are now so useless, that the best they can hope for, is for the armies of Allah to come rescue them from the totalitarian prison they have created for themselves.
“So I know you say deflation Amish. And you’ve said it since 2007. As a consumer, to me it looks like inflation. How is it not?”
For starters, you have read very little of what I said and understood none of it.
I correctly rang the deflation bell in 2005-2007 and it happened. Deflation went off in 2009. when the Fed reinflated corporate bonds.
I stated many times the economy would go in and out of deflation and another round is on the horizon.
Finally, it appears you do not even know what deflation definition I have been using despite reading me since 2007.
I understand what you “define” as deflation is not “perceived” as such from a layman’s standpoint. I’m no expert but when planning “long term” having an idea of where things may be in 5-10 years matters. Saving strategies change. Investing strategies change. Hindsight to the average guy/gal is inflation. When the prices double whether it’s caused by excess lending being cured by excess easing it’s at a minimum stealth inflation. It may not be hyper due to it not being parabolic inflation yet but what would one call it otherwise.
“Fed Discusses Regular Use of QE in Non-Emergencies”
QE has been going on continuously since the 2008 recession.
In August 2014, FED Bullard said that QE shouldn’t end. AS the
FED pushed back on their handle, Japan took over and pulled on theirs. It was a hand off, not a termination of QE. Once the hand off was complete, Bullard said QE should end. A sleight of hand trick. The EU is still what, running negative rates? I just never ends.
Jesus, more worthless jobs. How many economists, government workers, and other useless highly compensated “tools” do we need. Can’t wait for the coming recession and pension implosion; it cannot come soon enough. Yes, people will be hurt, but we need to trim this BS excess and reset. Should have never allowed these idiots to steal from taxpayers to bail out the banks back in ’08. Criminal and they know if they try it again there will be revolution in the streets.
“Should have never allowed these idiots to steal from taxpayers to bail out the banks back in ’08.”
Who was going to stop them? Denninger noted calls to congress were 100 to 1 or more against the bailout and he also noted that the FED was pulling in the slosh- liquidity, which he said would tank the market, and it did, while the congressional bailout debate occurred. Think the leslature would ignore a 700 point daily drop in the market?
The House voted no bailout, the Senate loaded up some pork and sent it back to the House, where it passed the second time around.
President Bush and both major party presidential candidates supported the bailout and the winner protected the bankers from prosecution for massive financial crimes, as McCain probably would have done as well.
Nobody was going to stop them. We let them do it. We bought the BS. I never got my main street bailout. ’08 is burned into my memory and I will never forget nor ever forgive.
In the face of this stupidity and corruption why isn’t gold at $2000 or even $5000? The PPT are hard at work with suppression of the price?
The 2011 peak was a blow off top. The price had gone from 250 or so to 1,900 in about 10 years, near an 8 fold increase. It was natural for the price to decline for an extended period of time after that.
So I know you say deflation Amish. And you’ve said it since 2007. But I just bought a new car (first since 2008- my old one is done done done) and they have literally doubled in 10 years. And I bought used with 10k miles-Japanese car because they last the longest. As a consumer, to me it looks like inflation. How is it not?
Banks create fraudulent securities in such quantities that there are no buyers. Fed, owned by banks, buys them at face value. CEO in charge of largest fraud ring at Goldman Sachs becomes US Treasury Secretary.
….and the dupes still jump on cue, when massa tells them to “save the syyyyystem!!” While even broads who realize “the system” is fundamentally broken, cheer for nothing but to make it even bigger and more powerful. Such is life in Idiotopia!
“discuss”….code for admit they’ve been printing money and buying up well …….everything for over decade,and they may as well now come out and admit it….sort of!
Recall it was just a few short years ago you’d get laughed off the internet (often by paid trolls—another supposed conspiracy) for any mention of the PPT.
The difference is, there are no conspiracies. It is all out in the open. Always has been that way: Government, and all its institutions, exist for the sole purpose of empowering and enriching themselves and their closest social circle. At the expense of everyone else.
Noone is hiding anything. Dumb people may play ostrich, but that doesn’t mean a bunch of obvious-to-anyone-literate-thieves are somehow involved in some form of “conspiracy” to steal.
Government, and those influencing them, steal and enslave because that is what governments, and those influencing them, do. If you want less theft and enslavement, you need less government. Not some mythical Great Leader, which will, thiiiiz tiiime, be goooood!!!! and not a conspiracy.
Test
Don’t worry, I am sure Mary Daly will do what’s best for America’s future because certainly she has a personal stake in it, seeing that she has a large brood of children whom she loves, unlike all the pro-EU leaders in Europe!
Oh wait!
(Paste Mary Daly wiki here which explains her childless status…Site seems to delete Wiki references though)
This is very disappointing, but not surprising. The Fed employs an army of economists who are essentially useful idiots spouting ridiculous nonsense based on flawed models and institutional group think. The the Fed’s economic stench is pervasive. It has even infiltrated the research at the Texas A&M Real Estate Center, funded by the dues of clueless real estate agents.
Congress should mandate a reduction in the Fed’s staff of economists by at least 50 percent, and restructure the Fed from the ground up. It is blatantly obvious this institution has become a central policy mechanism of the elite and well-connected. All of the drivel about full employment and stable prices is just that, nothing but a glorified PR campaign.
Mandate reduction by 100%. Then restructure into a bomb crater.
Read The Creature from Jekyll Island
I haven’t finished The Hidden History of WWI yet. I would recommend it highly. The first book on the subject that was written from the original accounts of that period. Totally different from what I was taught. The history written by the victors is a huge lie.
“Fed Discusses Regular Use of QE in Non-Emergencies”, but I never heard anybody call an end to the Emergency Economic Stabilization Act of 2008, so what’s the point here?
I smell a third congressional mandate coming. I’ll even draft congress’s note to the FOMC for them:
Dear Fed, since we obviously still don’t know crap about economic policy, and with AOC, Maxine, et al here now, we’re not likely to be learning, we were wondering if you’d submit a formal proposal for us to mandate that you use your balance sheet antics to repeal the business cycle? The one you’ve been airing through the San Francisco Fed will do.
I am shocked any of this could be in the US Constitution…
Oh wait…
Craziness. It seems the Fed is just out to help the rich with asset inflation.
Duh!
Yup! Housing is now a commodity used for speculation rather than a place to live. Get ride of interest/prop tax deductions. Get rid of the $250K tax free profit from sale after 2-years (double for married couple). It FUELS speculation.
The US Government/Corporate/Household “Debt-Berg” WILL be inflated away, of that there is no doubt.
Precisely how they (The Fed) will accomplish this feat is what is currently being considered.
Prepare yourselves accordingly.
God help us all!
Mish – how much gold is too much, or is it even possible to have too much?
At some point in time if you have too much you’ll be getting a knock on the door. Laws go straight out the window when situations get dire enough and are replaced with brute force.