November 14, 2013
Janet Yellen, Federal Reserve boss Ben Bernanke’s successor, told her Senate confirmers not to worry. Asset bubbles are not an issue. She reassured the Senate Banking Committee that the Fed’s policy of jacking up the values of equities and housing will not skewer markets.
She dispelled concern over a real estate bidding war launched by private equity firms that is gaining momentum in depressed housing markets. Yellen said the private cartel of banksters masquerading as a federal government agency will “have to watch this very carefully, but I don’t see that as an asset bubble. I see that as a very logical response of the market to generate a recovery in very hard-hit areas” such as Phoenix and Las Vegas.
In other words, shysters gaming the system is very logical and healthy.
Analysts see mega-low interest rates – now effectively zero – as driving up prices on assets such as farmland. Over the past year, the government has taken action four times against excessive risk in the market for high-risk, high-yield loans.
Yellen, however, does not see this as a problem. She does not see “bubble-like conditions.”
“I don’t see evidence at this point, in major sectors of asset prices, misalignments,” she confidently averred yesterday. “Although there is limited evidence of reach for yield, we don’t see a broad buildup in leverage, where the development of risks that I think at this stage poses a risk to financial stability.”
She said bond buying – creating $85 billion per month out of thin air – will continue under QE infinity until employment rises. No taper is in sight as previously hinted.
Loose money will continue to rule the day. Yellen told the New Jersey Democrat Robert Menendez the cartel will only tighten up the money supply as a last resort. She characterized a reversal in the bankster monetary policy as a “blunt instrument.”
A lone voice that will assuredly be overwhelmed came from Louisiana Republican Senator David Vitter, who had the courage to call a spade a spade. “I’ll be voting no” on Yellen’s confirmation, he said. Vitter said Yellen made it clear “she would continue the Fed’s current policies of continuing ‘Too Big to Fail’ and free money, quantitative easing, with no wind down in sight.”
Despite Vitter’s criticism the Senate will undoubtedly move to replace Bubbles Ben with Calamity Janet. Before this can happen, the confirmers might want to look at Federal Reserve transcripts from 2006. They reveal a carefree attitude about the housing market that would implode with a deafening roar soon thereafter.
“They saw it. They saw that housing was crashing. They joked about the problems that home builders were having in selling homes,” said Binyamin Appelbaum, a reporter for The New York Times, earlier this year.
Banksters often do that. They laugh and chortle over the misery of the little people who suffer under the sledge hammer of their economic policies.
The Federal Reserve cartel inflates asset bubbles and then allows them to crash. Bernanke admitted as much in 2002. “Regarding the Great Depression. You’re right, we did it. We’re very sorry,” he said during a speech at a University of Chicago conference honoring Milton Friedman on his 90th birthday.
And they’ll do it again when the time is right. Unfortunately, the grocery clerks dressed up as senators at the banking committee are none the wiser. Like trained circus seals they clap and slaver over whatever pencil-necked geek the cartel throws out for the dog and pony show that is Senate confirmation.