Posted tagged ‘Janet Yellen’

Danielle DiMartino Booth: “The Fed Has Crippled Our Middle Class. Completely Gutted It Out”

April 27, 2017

Danielle DiMartino Booth was a Dallas Fed Staffer. Her knew book – Fed Up: An Insider’s Take On Why The Federal Reserve Is Bad For America”, gives incite into the incestuous intellectual relationship Fed policy makers have with each other. She calls it “group stink”.

Dimartino Booth is interviewed by Jeff Deist of the Mises Institute in the video below.

Here are some excerpts from the video.

Deist:The fed is almost exclusively staffed by academics, by phd’s. That wasn’t always the case. Could you summarize this impact of academization of the Fed for us?”

Booth: “I think the end result of all of this, which stands in direct contrast to the mandates of the original 1913 Act…to insure intellectual diversity and industrial diversity on the board and among the fed leadership. But is has created what I call “Group Stink”. It is the inability to decent, the inability to say no. Most people inside the Fed think the same. They don’t take the complications of a global and very modern financial system into account…… It is a lack of appreciation for anything that you and I would consider to be on planet earth. And it is what has made the Fed so very out of touch, and angered so many people. They might not know it’s the Fed. But they know something has gone very very wrong with their financial well-being and who is in control of their financial well-being.

4:50 – Deist: “A huge percentage of these Fed economists are Ivy League graduates. So despite all thier book learning, do you think people in the Fed have read Austrian stuff…..have they read Mises and Hayek. Or is this just completely outside of their orbit?

Booth: “You know I think it might have in the index of one of their economic text books. But I would bring up the word ‘malinvestment’ and their eyeballs would roll into the back of their head.

My Take From 2013: Thomas Sowell calls it “credentialed ignorance”. He is being rather nice. I would call it an example of intellectual inbreeding. These Federal Reserve policy makers have earned their economic credentials from some of the “best” Universities. That fact means we should stand in awe of them? Unfortunately I don’t give my respect to people with “status” that easily. I think respect is earned. What I have observed is these people live in a continual feed back loop. They all think pretty much the same way because they were taught by professors who all think the same way. They are hired to work for people in Government who think the same way. They are very rarely challenged to think outside of their small tunnel of knowledge protecting them from their mountain of ignorance. A mountain that would crash down on them if their tunnel wasn’t there.

Deist: “Do you think they really in their hearts, believe that …..monetary policy can create economic growth in and of itself?

Booth: “If they don’t believe it, they do a really good job of faking it…. Because it is clear that they do not understand the damage that’s been done to the social fabric of this country, to the culture, to have driven down multiple generations throats the idea that the only way to get growth is through the creation of debt. That is not the American was. It is not what capitalism is based on….. And it has crippled our middle class. Completely gutted it out. While at the same time corrupting all manner of institutions; corporations, banks, pensions you name it.”

6:58 – Deist: “Do you think that your average Fed economist would view what the Fed does in terms of interest rate targeting as something that’s not capitalism. That sounds like something out of a Soviet Politburo?

Booth: “I think that… part of the problem……where a disconnect is born that the Fed leaders …..have to be on the receiving end of the policies they make. It is like congress not having to deal with the worst vestiges of Obamacare. They have platinum health plans….. So I think a lot of the leaders at the Fed can delude themselves into thinking that they are doing good-by the people whose financial situations they shepherd, when in fact they are not. But to your other point, they all study the same basic schools of thought and that is what is broken inside of our higher learning institutions.

12:55 – Deist: “Do you think there is any way the Fed can really unwind all the $4 trillion treasury debt or worse on its balance sheet?

Booth: “Unfortunately I think markets have become addicted to the notion, if you will, that every single bond that central banks, world-wide, have purchased. Every single bond has been expunged from the supply forever. Otherwise I don’t think we would have interest rates where they are. I think that the Fed can talk tough about reducing the balance sheet if it wants to play politics and push the economy into recession. But they consider that 4.5 trillion dollars to be their fortress, their power base. The balance sheet has gone to their head.”

13:42 – Deist: “Yellen is in a tough spot…..If she wants to raise interest rates the debt service for Congress can double…..But without raising interest rates, how does she continue to create a market for US treasuries…….She’s in a ship saw.

Booth: “It is an absolute dilemma. But it is a corner into which the Fed has painted itself. There were people on the inside saying it’s a slippery slope if you go to zero. This will not end well. The market is not screaming for lower interest rates. The market is telling you there is a liquidity freeze going on and that it needs other things. If you go to zero, you’re going to introduce distortions and make it extremely difficult, one day, to ever exit. And guess what’s happened. It has become the Achilles heel not just of Janet Yellen and the Federal Reserve, but I would argue the Bank of Japan, Bank of China, The European Central Bank, Mario Draghi. This is a shared global phenomenon.

15:00 – Deist: “Who becomes the central banks banker? Is it some sort of IMF scenario if they can’t work their way out of this?

Booth: “Yes but who funds the IMF. Again there’s nothing elegant I can suggest to you as a way out of this situation……If you speak to the academics who have the same school of thought they will tell you that we will just have to monetize the debt away. that there will be a gentleman’s agreement between the developed countries that have lots of debt ad that we will just walk off into the sunset and everything will be fine. I consider that the last stop on the currency war train and the next stop to be an actual world war…….I don’t think countries that don’t have high debt levels would stand still for it.”

Link to her web site – dimartinobooth.com.

 

EXPLAINING THE FED AND INTEREST RATES.

Related ArticleFederal Reserve Policy Makers Have An Incestuous Intellectual Relationship With Each Other, at austrianaddict.com.

Related ArticleA Tornado vs.  The Fed. Which Is More Destructive, at austrianaddict.com.

Related ArticleThe Role Of Interest Rates In A Market Economy, at austrianaddict.com.

Related Article0% Interest Rate x Eight Years = The Fed’s ZIRP Doesn’t Work, at austrianaddict.com.

Related ArticleWe Can’t Recreate The Garden Of Eden, at austrianaddict.com.

Related ArticleCapital Consumption, aka, Eating Our Seed Corn, at austrianaddict.com.

Advertisements

Must Reads For The Week 11/7/15

November 6, 2015

Yellen Says Negative Rates On Table “If Outlook Worsens“, at zerohedge.com. The Fed has kept their interest rate at zero percent for the last six years. After talking about raising the rate for almost two years, they couldn’t even raise it a quarter of a point in October. Now they are floating the idea that of a negative interest rate. I have a few questions. Do you think our economy is improving or fragile? Does the Fed really think the economy is improving? Is the Fed just propping up the financial markets at our expense?   Some of the answers are in this article, Fed Admits “Something’s Going On Here That We Maybe Don’t Understand, at zerohedge.com.

The Unseen Victims Of Export-Import Bank Cronyism, at economicpolicyjournal.com. This is bi-partisan crony capitalism. More democrats than republicans voted for Ex-Im reauthorization.

Bernie Sanders Bashes Uber, Uses It For His Taxi Rides, by Blake Neff, at thelibertarianrepublic.com. This is typical. People who hate the free market blast it, while benefiting from the goods and services created by the free market. They have no idea where all their stuff came from.

Airbnb Wins In San Francisco Vote, at targetliberty.com. The leftists in San Francisco stood up for property rights and against the hotel industry. Is this an aberration, or a ray of hope?

Pot Battle In Ohio, at mises.org. In spite of the cartel members spending millions of dollars advertising issue 3 as  marijuana legalization, Ohio voters understood that issue 3 was going to create a cartel for growing pot voting it down almost 2 to 1.

China Two-Child Policy Not Valid Until March, Government Says, at bbc.com. How many people know that China had a one child policy? The Chinese Government said they were changing because of China’s aging population, and to help their economy.

Muslim Man Warns German: “We Will Marry Your Daughters And Conquer You With Births” at zerohedge.com. Demographics is destiny. Mark Steyn wrote about this in America Alone.

Johnny Can’t Read Or Add, at tammybruce.com. All the money we spend on education isn’t benefiting the students. It’s benefiting the teachers unions and school administrators.

For World Health Organization, Red Meat Is A Red Herring, by Yuri Multsev, at mises.org. Excerpt from the article. “This new anti-meat campaign, however is not about your health, but about the “health of the planet”. WHO’s attack on meat is happening just before the Paris gathering on global warming and is a part of the slow motion socialist revolution poorly disguised as “climate change awareness”.”

Why Are More Young Adults Still Living At Home, at stlouisfed.org. Student loan debt, higher housing prices, and unemployment or low paying jobs are the reason given by the St. Louis Fed. It’s funny that all these reasons were caused by the Federal Reserve electronically printing counterfeit money and its zero interest rate policy.

It Begins: Government To Pay Doctors To Tell Patients To Kill Themselves, at economicpolicyjournal.com. Excerpt from the article: “When you are a drain on government coffers rather than a taxpayer, and the crony health insurance sector fears you will become expensive to keep alive, the government would rather see you dead.

Must Reads For The Week 12/20/14

December 20, 2014
The pen is mightier than the sword...

 The pen is mightier than the sword… (Photo credit: mbshane)

Elvira Nabiullina: Central Banker Of The Year, at economicpolicyjournal.com. Russian central bank chair Elvira Nabiulinna raised the interest rate from 10.5% to 17% in order to reign in inflation and also to stop the collapse of the ruble which was caused when the central bank stopped its previous multiple billion dollar intervention. Here is an excerpt from the article, “The Central Bank has yet to hint they would start a stimulus project, or money printing, to avoid recession…..Contrast this coolness with the panic in the eyes of Fed chairman Ben Bernanke and Treasury Secretary Hank Paulson during the 2008 financial crisis, when they caused the US government to intervene one hundred different ways and bail out the banksters.”

Can we trade Fed Chairman Janet Yellen, a couple billion of electronically printed counterfeit U.S. dollars, and a player to be named later for Elvira Nabiullina.

Money For Nothing: Volcker, from Liberty Street Films. Below is a video clip about the Federal Reserve Bank from the movie “Money For Nothing”. The clip talks about Fed Chairman Paul Volker raising the interest rates to above 20% in order to kill inflation and cure the easy money sickness that plagued the U.S. economy during the 70’s and early 80’s. This is what Elvira Nabiulina is attempting to do in Russia by raising interest rates to 17%. The U.S economy will have to eventually go through the liquidation of economic activity artificially brought into existence because the Fed electronically printed trillions of counterfeit dollars, and also their zero interest rate policy. Sooner or later the correction has to come.

 

Where The ‘Great Recovery’ Is 25% Worse Than The ‘Great Recession‘, at zerohedge.com. We talked about companies using easy money to buy back their stock in order to raise its price. Here are some interesting charts about how Caterpillar has been doing during this great recovery.

Six Ways The Government Criminalizes Economic Activity, by Diana Furchtgott Roth, at marketwatch.com. On the whim of a central planner you could become a criminal.

Dead Weight Loss From The New California Gas Tax, by David Henderson, at econlog.econlib.org. California’s cap-and-trade regulations will cost consumers 10 cents more per gallon. I don’t understand this excerpt from the article. “When you buy one gallon of California gasoline, the seller will have to cover about 18 pounds of emissions. At the current price of allowances–about $12 per metric ton–that works out to about 10 cents per gallon of gas…” My question is; if a gallon of gas weighs 6.25 lbs, how can it produce 18 lbs of emissions? I have to ask my brother, who is a chemist, ow this works.

Your All Electric Car May Not Be So Green, by Seth Borenstein, at ap.org. Apparently coal powered cars pollute more than gasoline powered cars.

Socialist On The Line Caption Contest, at zerohedge.com. Their caption is, If Cuba is good socialism, and Venezuela is bad socialism, what does that make America. My caption: George Washington is thinking, “there’s a lot of credentialed ignorance in this room.

Senator Sanders Blamed Speculators For The Rise In Oil Prices From Jan-June; Do They Now Get The Credit For The Drop In Oil Prices Since July? by Mark J. Perry, at carpe diem blog. Supply and demand are that driving factors in setting the price of oil at any given time, in spite of all the Government intervention into the oil business.  Speculators helped bring supply and demand into line quicker than it would have happened if the speculators had stayed out.

Study This For A While, at economicpolicyjournal.com. The Government is making a killing on student loans by making college students debt serfs.

3D Printed Prosthetic Legs Allow Derby The Dog To Run For The First Time, by Catherine Winter-Hebert, at inhabitat.com. Watch the short video.

Federal Budget Contains Provision Preventing Attempts To Ban Lead Ammunition, by John Lott, at johnrlott.blogspot.com. At least something good was in the budget.

As Michelle Nags America…Which Professions Have The Biggest Waist Lines, by Chris Rossini, at targetliberty.com. Looks like our first responders are spending too much time at Dunkin Donuts.