STAFF NEWS & ANALYSIS
From Fed to Farce as Yellen Continues to Pitch a Rate Hike
By Daily Bell Staff - June 07, 2016

3 Signs of a Recession Janet Yellen Is Ignoring … The Fed Chair’s upbeat speech glossed over key warning signs. Federal Reserve Chair Janet Yellen was upbeat on Monday in a speech at The World Affairs Council, where she largely dismissed the negative implications of Friday’s jobs report, which showed that the U.S. economy added just 38,000 new jobs, the worst monthly reading in nearly six years.  -Fortune

We wrote an article some time after Yellen’s appointment as Federal Reserve Chairman that suggested she’d been elevated to her current position in order to take the blame for the coming worldwide economic implosion.

We see no reason to change our mind.

Increasingly, the signs of disaster become clearer. And Yellen, meanwhile, looks like she doesn’t know what she’s talking about.

(Not that she ever did.)

More and more, she sounds like an equity pitchman. Of course, the Fed is nothing like what it is portrayed to be. But in the past it’s been less obvious.

With Yellen, it’s ridiculous.

Late last year she was positive the US economy was “recovering.”

Then she hiked rates by a mere 25 basis points and world stock markets imploded.

She never apologized of course, and the mainstream media gave her a pass.

But it was obvious she’d been wrong, disastrously so.

Now it is June – mid year – and Yellen has begun to talk up a rate hike again.

It was supposed to happen later in June after a meeting of the Federal Open Market Committee.

But recent employment numbers turned sour.

And again Yellen looks silly.

Now even the mainstream media cannot keep up the pretense.

This Fortune magazine article (see excerpt above) is a good example.

It points out that the rate of job creation is falling. “Businesses are not firing many people, but they’ve also cut back significantly on hiring and other expenditures.”

Capital investment is down as well. “The decline in companies’ willingness to invest in people is matched by its lack of interest in investing in new capital equipment.”

Payroll data shows a slowing economy. So does data from the Institute for Supply Management. This data, released Friday, “showed the growth in the services sector slowing in May, with the employment component falling into contractionary territory.”

There is no sign, here, of an impending “boom.” Not even the tiniest sniff.

Meanwhile, it becomes increasingly obvious that one of Yellen’s main goals is to sustain stock market growth, at least for now.

Presumably until after presidential elections.

Conversely, she is to ensure that the dollar doesn’t move down too hard and too quickly against gold.

Yellen is fighting a losing battle in this regard. The world is at the end of a long fiat-money expansion driven by zero interest rates.

Central bankers have nowhere to go now.

That’s the reason for less-than-zero interest rates and speculation  about a cashless global society.

Stocks are going down. Gold is going up.

The world and the US especially are more likely to face stagflation than  a further economic boom.

Central banks themselves are buying gold.

Billionaires like George Soros and Carl Icahn are taking positions in gold and gold derivatives.

Gold miners are moving up.

And there are predictions of significant catastrophe worldwide from people like Soros’s former partner Jim Rogers.

Rogers recently gave an interview in which he said that sovereign debt was insupportable and sooner or later there would be a catastrophic collapse that would wipe out whole nations.

He predicted, for instance, the end of the UK as a viable entity.

The mainstream is beginning to mention warning signs that Yellen is glossing over.

But the real economic situation worldwide is a good deal worse than anything the mainstream media is currently describing.

The reality of what’s taken place is clear enough. There is no recovery nor will there be. Not in the US. Not in Europe. Not in Japan or China.

Conclusion: Bet on stocks if you want in the short term. But in the medium- and long-term, precious metals will continue to appreciate. This is part of a much larger business cycle. This should be clear to Yellen. But at this point, she’s more of a pitchman than an economist or Fed Chairman.

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  • alaska3636

    Also, the banks are more too bigger to failer(er):
    https://www.thestreet.com/story/13598498/1/lsquo-too-big-to-fail-rsquo-bank-review-finds-wells-fargo-now-number-2.html

    “JPMorgan remains the largest money center bank with $2.16 trillion in assets at the end of the first quarter, up 4.6% sequentially and down 3.9% year over year. This bank controls 13.2% of the total assets in the banking system down from 14.2% a year ago.

    Wells Fargo has $1.69 trillion in total assets at the end of the first quarter, up 3.6% sequentially and up 6.1% year over year. This bank controls 10.4% of the total assets in the banking system.

    Bank of America slips into third place with $1.68 trillion in total assets at the end of the first quarter, up 0.9% sequentially and up 3.1% year over year. This bank controls 10.3% of the total assets in the banking system.

    Citigroup increased total assets in the first quarter by 3.3% to $1.3 trillion and is up just 0.4% year over year. This bank controls 8.2% of the total assets in the banking system.”

    What are the odds that we hear an explanation of price fixing cronyism and the allocation of scarce resources? Better just to keep the interest rates down, I guess…

  • Bruce C.

    I’m intrigued with just how much control “the financial authorities” have. Everyone seems confident that nothing “bad” will happen before the election, but why such confidence? If they do have control then will they still have it after the election, and then what? Would they let things go if a Democrat wins the Presidency or only if a Republican?

    For that matter, why wait? Who would that help or hurt, and why?

    • mary

      Good point, Bruce. These people are not the infallible gods the msm claims them to be. Witness the last implosion was before a presidential election.

  • Praetor

    If I had a pet frog. It would look like Janet Yellen. She looks like a cartoon character!!!

  • r2bzjudge

    “But at this point, she’s more of a pitchman than an economist or Fed Chairman.”

    The FED talks out both sides of its mouth. When the stock market dumped in 2014, Bullard said the FED should not end QE. The stock market rocketed up to a new all time high. QE ended, then Japan immediately announced they were picking up the baton. Bullard then said QE should end and his earlier remarks were misunderstood. No one waits months to say they were misunderstood. Bullard manipulated the stock market.

    We were told the June meeting was live, then we were told something different. The FED has no credibility.

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