Now that Helicopter Ben is gone, in order to figure out exactly how this new FED will continue to manipulate the financial markets, we need to know more about new FED Chair Janet Yellen.
First, her background is as an Ivy league left wing liberal, and for many reading this, you may already know everything that you need to know.
Second, she’s a Keynesian economist, which means that she believes in big government and its ability to grow an economy, rather than the primary beliefs of Austrian economists, which credits the individual, and their abilities, with this power. Another primary distinction between the two schools of thought, and this is a major difference, is that Austrian economists define inflation by the amount of new currency printed into circulation. Keynesian economists define inflation as the increase in the price of goods.
If you’ve followed my work for any amount of time at all, you know my views on the definition and cause of inflation, and it’s quite different from the FED’s and Keynesian economists. As the FED’s 100 year history of failure has clearly proven, the FED’s massive increase in money supply over the last century has caused the US Dollar to fall by 97%...which has forced the population to continue paying more and more for the consumables they MUST purchase each month, as they have skyrocketed in price.
Those that argue these facts look like… well…the absolute morons that they are. How can I make such a bold statement with confidence? After all, in addition to Yellen, the FED has more than 1000 highly paid economists on their payroll, and calling this many so-called experts “morons” could make me the biggest moron of all.
Here’s how I can make my statements about the real definition of inflation with a VERY high level of confidence…a little thing called “the facts”. Right now….today…we have all-time high prices for electricity, beef, and home rentals. Last time I checked, we all use and must pay for electricity…most of us eat beef…and due to continued economic stress, more Americans than ever are renting instead of owning the home they live in. So, while the FED may not include these most important “real world” inflationary statistics in their CPI calculations (it’s a very small component piece now…they changed the way they calculate the CPI over two decades ago), for those of us that are forced to pay for these things, we know all too well that inflation is much closer to 10% than it is to their official CPI of just 2%. So….this is how I can call the FED’s government mouthpieces morons and do it with a straight face.
Back to Bernanke for a moment. Remember his horrible track record with our most recent FED induced financial collapse? If not, please go back and read any of my ten to twenty VRA updates, where I pointed out some of his most infamous quotes and predictions. Or, simply do a quick Google search for them.
Or…how about this. I’ll give you this classic Bernanke video from the VRA way back machine: (Spoiler alert: Bernanke in 2007 – “The slowdown in real estate should have no serious impact on economic growth or on full employment).
Back to Yellen. Yellen’s team of government lackeys have done their best to paint her as a much better predictor of the future, going so far as to claim that she (unlike Bernanke) actually saw the mounting crisis in 2007 and spoke often of what was coming. Really?? Let’s see what Janet said about her own Nostradamus-like abilities, while she was the Chair of the San Francisco FED.
In 2010, Yellen told the Financial Crisis Inquiry Commission that she “had not explored the San Francisco Fed’s ability to act unilaterally, taking the view that it had to do what Washington said”.
“For my own part,” Yellen said, “I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s …I didn’t see any of that coming until it happened.”
Her interviewers were stunned.
Yellen didn’t see or appreciate the risks with securitization?? You know…those CDO’s, CMO’s and CDS’s that played some of the single largest roles in bankrupting Wall Street and the entire banking industry, and almost the entire planet??
Yellen didn’t see or appreciate the risks with the credit ratings agencies?? The same credit ratings agencies that the entire world knew were PAID to rate the very same financial co’s that they provided ratings for??
The quote is beyond stunning; Yellen “didn’t see any of that coming until it happened”. It would seem impossible to believe if she hadn’t actually spoken these words into existence HERSELF.
And now, THIS is the person that we are entrusting the world’s financial future to?
Forgive me if I’m overly dubious about her abilities. I’m sure she’s a very nice lady, but when push comes to shove, we already know exactly what Yellen’s next move will be. She will PRINT, PRINT, PRINT trillions upon trillions in fiat currency into existence…just like Bernanke before her….and, Greenspan before him…ad nauseam.
The good news…and yes, there is some very good news for those of us that are able to keep an open mind and think as contrarians..is that we can construct our own playbook to profit immensely from increased levels of inflation. This is one of the keys to success for the VRA, and it has been for more than a decade. This mindset enabled us to buy gold and silver back in 2003 at prices 500% lower than today. It also enabled us to lock in 170% gains in options trading over a 3 week period in February, and it is positioning us for more than 1000% gains in as many as 5-7 grand slams that I’ve already identified.
Regardless of what our feckless leaders do, we will be positioned to not only survive, but to thrive!
Until Next Time,