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Yellen Is Flat-Out Wrong: Financial Bubbles Are Caused By The Fed, Not The Market

Yellen Is Flat-Out Wrong: Financial Bubbles Are Caused By The Fed, Not The Market

Tyler Durden's pictureSubmitted by Tyler Durden on 07/05/2014 21:15 -0400

Submitted by Jeffrey Snider of Alhambra Partners,

More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn't seem like it resonated with her or policymakers. The major bond selloff, which led to global ripples of crisis in credit, funding and currencies, was the opposite of flexibility. Perhaps a better definition of the word would be a place to start.

But her meaning was a bit different, in that it is clear (from this speech and prior assertions, wrong as they were, about the mid-2000’s housing bubble) she sees bubbles as “market” events in which the central bank’s role is primarily shock absorption. In other words, idiot investors wholly of their own accord create bubbles and it’s the job of the munificent and enlightened Federal Reserve to help ensure that such “market” madness is “contained” without further economic destruction.

Read more: http://www.zerohedge.com/news/2014-07-05/yellen-flat-out-wro...



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Even if...

We do manage to audit the Fed, the really good lookin girls are still gonna date the Kabal. Because they got all the money. It just doesn't matter.

I was just Kidding!

Of course it matters if we audit the Fed. One of the best days of my life was in late 2012, just before the election I was watching riveted on CSPAN while the House did a runaway vote to audit the Fed. I still can't believe one prick (Harry Reid)from Vegas could stop it from reaching the floor of the Senate.

Michael Nystrom's picture

Wong

The Free Market would invent the Fed.

In the end, the Fed is the scapegoat. Even the Fed is not the issue.

You've got to go deeper.

They buried that dog deep.

He's the man.

How Do You Figure The FED Is The Invention Of The Free Market?

I'd like to hear a reasonable explanation of that one Mich~ael...

It was created by the big banks and it has always worked very hard to benefit the big banks. During the Fed era, the big banks have become the most powerful economic entities on the entire planet. Our entire economy is now based on debt, and the big banks are at the very center of this debt spiral.

Congressman Charles A. Lindbergh Sr. (1859-1924) On The Federal Reserve

https://www.youtube.com/watch?v=EjdMH9wvDmQ

Maybe he's talking about fractional reserve banking

or Central bank planning that existed prior to the fed.

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"Take hold of the future or the future will take hold of you." -- Patrick Dixon