STAFF NEWS & ANALYSIS
Disband the Fed: The Most Accurate Statement Yellen Could Make
By Daily Bell Staff - June 22, 2016

Fed’s Yellen: US economy faces ‘considerable uncertainty’  … Federal Reserve Board Chairwoman Janet Yellen testifies before the Senate Banking, Housing and Urban Affairs Committee on June 21, 2016 in Washington on June 21, 2016 …  Federal Reserve Chair Janet Yellen warned Tuesday that the US economy faces “considerable uncertainty” from slower domestic activity and from a possible British vote to break with the European Union.  -Yahoo

Here’s a question: Why is the Senate listening to Janet Yellen about the economy?

It’s like the blind leading the blind.

The Senate has no idea what’s going on with the economy.

Neither does Yellen.

She was wrong about hiking rates. She was wrong about the direction of the market. And she’s been wrong about the economy as well. It’s going down not up.

The US is in the midst of a kind of depression.

And there’s no one economy anyway. The economy is made up of tens of millions of people. To generalize about them may be feasible but not necessarily accurate.

More:

Pointing to dragging hiring and business investment recently, and to the risk that a pro-Brexit vote will send shock waves through global markets, Yellen signaled that the Fed has become less optimistic about US growth over the short term and will proceed with great caution on plans to raise interest rates.

She said in testimony to the Senate Banking Committee that US growth has picked up noticeably in the second quarter from the sluggish pace at the beginning of the year. Nevertheless, she said economic growth has been uneven and clear downside risks remain a threat.

This all sounds like gobbledygook to us. She says one thing and then she says another.

She has no more idea what’s going on than the Senate does.

No doubt she was accorded a respectful hearing and provided a cold beverage of her choice.

She was visiting Congress to present her semi-annual testimony on the state of the US economy and Federal Reserve monetary policy.

Reports indicate that every time she made a statement she qualified it by saying the opposite.

On recession, for instance: “She rejected predictions that the US faces a possible recession this year.” But here is her subsequent quote:

“I don’t think [recession is the] most likely case, but we just don’t know what will happen.”

No she doesn’t know what’s going to happen.

And neither do others on the Fed Board or Congressmen themselves.

Is it too much to ask to get rid of the Fed? Just jettison it.

Yellen doesn’t know what she’s talking about, nor have her predecessors.

The only thing central banks can possibly do is damage economies by setting real interest rates too low or too high.

And make predictions that are never accurate.

In fact, central banking doesn’t work because it is impossible to make accurate predictions about the future, especially when it comes to the economies of industrialized states. There are simply too many factors.

Conclusion: The most accurate statement Yellen could make is that she doesn’t know what’s going on with the economy and will never be able to know. Then she should suggest disbanding the Fed before it does further damage. This would be the most accurate statement she could make.

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  • Laird

    “The only thing central banks can possibly do is damage economies by setting real interest rates too low or too high.”

    The government shouldn’t be setting interest rates at all, high, low or otherwise. Interest rates are merely the price of money, and the market should set that price. When government interferes with the price mechanism distortions and inefficiencies always result.

  • Guy Christopher

    The effort to end the fed has been well underway for awhile now…… https://www.soundmoneydefense.org/

  • johnny

    I do not believe there is a man alive that can take down the FED!

  • windsor1

    The idea that the Fed is going away is naive thinking. The Fed and Banks own the economy and political system. Pres. Kennedy died trying to end the fed with executive order 11110. Anyone else who tries to mess with the existing system will meet the same fate.
    The little guy couldn’t care less about the corrupt Federal Reserve system. It does not hold the same political importance in politics as gay rights and planned parenthood or Black lives matter. The Fed is never discussed on ESPN or even by Anderson or Wolf Blitzer on CNN. Hence it is a non existent issue in the mind of Boobus Americanus.
    The comment that Yellen has no idea what is going on is simply delusional thinking. She has 300 phd’s in economics on tap. The entire economy is sick and corrupt. Captialism is dead but crony capitalism is alive and well. The problem is that Yellen’s agenda is not America’s agenda. It was the greed of the banking system and Wall street that created an enormous credit bubble by setting a low interest rate policy.
    Now that the economy is sick and lethargic raising rates would create an avalanche in the economy. Corporations and banks would hit the skids as the derivatives market caves in and over indebted corporations could not handle the debt loads.
    So what does the group of 300 wise men recommend; not not slowly push rates up to put a stop to runaway borrowing at cheap rates so that the economy can cool down and reset itself, but to freeze rates at zero percent and continue the madness.
    Unlike the Nobel prize winning president who claims that anyone who thinks the economy is in trouble is peddling fiction, Yellen knows America is in deep doo doo.
    The gov’t dept level is at the point it is unmanageable. An increase in rates would mean an increase in taxes. The public would not tolerate this.
    Corporations have abandoned America in mass for more friendly venues where there is no litigation, no benefit programs, low wages, and no pollution standards and plenty of cheap labor. The bankers are behind new onerous trade agreements like TTIP which will turn over the US economy and policy setting to Corporations.
    Yellen works for the globalist bankers. The plan is to de-industrialize America and offshore all manufacturing to Asia. With no industrial base America will collapse. Whith too much debt America is doomed. Loosing its reserve currency status is inevitable. Today America exports bombs and cardboard. It is ironic with over 100 million Americans under employed or unemployed and the little guy still doesn’t understand Yellen’s program. The program is to collapse the American economy and bring in a New World Order. Yellen’s economic program is America’s death by 1,000 cuts. Her job is to be the economic caretaker until she resigns or the collapse happens.
    Your job is not to question the trillions of dollars that Rumsfeld said simply disappeared from the Pentagon accounts. Your job is not to question bailing out banks and then paying bonuses to bankers that failed. You are simply a “human resource” to be harvested like a cow in a pasture. You can though if you wish call Yellen and idiot or whatever you want. The smart folks knew we were doomed the day Greenspan “retired”. The same people that run Wall Street and the Fed will still be in control long after you and I are gone. As they destroy the old economy they will reinvent themselves and manage the new economy.

    • Bruce C.

      “She has 300 phd’s in economics on tap.”

      Actually it’s more like 1,500.

  • Bruce C.

    I too wonder what Yellen’s beverage of choice was. I would probably opt for a gin & tonic unless Kurtz was around to take that as a coded message for BREXIT.

  • it doesn’t matter

    “End the FED” has been taken live, promoted up from their limited hangout Alt-medias to their mainstream medias, ya?. Yellen’s incompetent sputtering idiot act is being put on public display for the average Joe and Jane Simpleton families that don’t normally pay much attention. It is a problem, reaction, solution preparation step, well understood by you and I…

    The plan is to place the blame for their heavily promoted “FED Mistake” (in July if schedule holds?) on the bumbling, sweet, little old lady and throw her under the bus as part of their interim solution. Meanwhile, it has all along been Stanley Fischer, whom is actually directing the US Fed franchise, not Janet Yellen.

    I often wonder (nearly convinced actually!) if they intend to promote Stanley? He is a dual Israeli/US citizen so that should stir up a considerable amount of fuss within their controlled Alt-medias? Those flames may quickly leap to their controlled msm? That plot has already been heavily seeded, no?

    This step is necessary because the old central banking institutions must be dismantled to provide an environment for the new. Note that a Fed replacement has not been offered to us just yet…. We only get an “End the FED” promotion at this point, so that indicates a chaotic and confusing script is awaiting the masses. A grande show.

    There is one more step after this one (which is scripted spectacularly) then its game time.
    Ahhh… the sights and smells of directed chaos in the morning…. 🙂

  • Bruce C.

    The good thing is that if an entity like the Fed continues to be wrong in their predictions, assessments and analyses, and even their confidence wavers, then they might be disbanded for those basic, obvious and superficial reasons alone. In other words any deeper understanding of central banking, etc. may not be necessary to conclude the very same thing that such insights would lead to. That’s good news since the US Congress are the only ones who have the power to de-charter it.

    The same thing may be happening in many areas globally simply because the complexities are proving too much even for the insiders who think they control things.

    • mary

      The fed has been screwing up the US and world economies from the get go, but is still nowhere near being abandoned. Got one word for you: f’agetaboutit. It’s here to stay with a larger roll coming up.

  • alaska3636

    Dear the Bell,

    I find it interesting how few outlets are covering Brexit. The most recent MSM narrative I saw was predictable though: experts agree that Brexit would…(lists several negative economic forecasts).

    Brexit is a nationalistic movement that reflects individual expressions of frustration. People don’t care what the experts think about the matter. Nevertheless, I wrote some more comprehensive thoughts on the matter here:

    https://alaska3636.blogspot.com/2016/06/expertise-is-overated-on-average.html

    Just a simple application of Mises’ methodological individualism. Nothing that experts care about anyway.

  • Hippity

    Not only could we do without the Fed, but all politicians too. Wouldn’t that make for a strong economy. Harry S. Truman once said: “I wish I could meet a one armed economist, because they will say ‘on the one hand this, but on the other hand!’ “

    • Pilgrim

      “For the transgression of a land many are the princes thereof: but by a man of understanding and knowledge the state thereof shall be prolonged.” – Proverbs 28:2

  • ED.F

    I disagree,the FED knows exactly what it is doing.Simply put,It is running the biggest Ponzi scheme in the history of mankind .They LIE !!!.Volker and Greenspan were probably the best,Yellen could be the worst.The Problem is once all those lies add up into the TRILLIONS (those little green pieces of paper) the lies get much more complicated to control, because MATH doesn’t LIE !!.I believe this is where the monetary system is at in its sequence of existence .They all fail !! And now that people can access the Internet and dig for the Truth the Ponzi is falling apart.The corrupt know this and their manipulations are becoming more :in your face 🙁 so to speak. As long as they can feed the something for nothing’s it will continue.But when people go hungry or the grid goes down,it’s game over! Buy a gun with lots of ammo,prep to a comfortable ability and hope it doesn’t get ugly !

  • ICFubar

    I enjoyed the article.

    The Fed’s problem is that they are wedded to an obsolete orthodox vision and thinking process on economics and capitalism, while pushing a neo liberal financialization economic plan for the world. The result is disaster. The only way to avoid an economic collapse is some form of debt jubilee….its the debt stupid, especially the private household and commercial debt. The politicians are as equally stupid in their thinking that austerity is the only way forward, which is the opposite direction they need to take. For a look at new thinking that accurately models how capitalism actually works and a fix for its more pronounced problems have a view on this link.

    https://www.youtube.com/watch?v=KIaXVntqlUE

    • ED.F

      ICFUBAR,,,,Excellent sign on,couldn’t be better,lol.

  • Victoria

    The Fed is also a front for the Treasury’s exchange stabilization fund, an unaccountable secret slush fund for unappropriated international loans and regime change. Both institutions must be dismantled.

  • Pilgrim

    Yellen said: “US growth has picked up noticeably in the second quarter from the sluggish pace at the beginning of the year. Nevertheless, she said economic growth has been uneven and clear downside risks remain a threat.”

    In other words, like every quarter, the initial report is glowing with growth, then a revision comes out a week later that downgrades the numbers in the week-old report. She knows the downgrade is coming; that’s the “downside risk” she’s hedging her statement with.

    Axioms aren’t negotiable. You can’t increase egg production by strangling the chicken.

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