Bernanke's Dustbin

Townhall.com ^ | January 8, 2013 | Bill Tatro

[Kaslin]

Let me see if I understand this correctly. 

QE4 is announced and it was declared that bonds will be purchased for as long as the eye can see or until we achieve an unemployment rate of 6.5%. 

Several weeks later, the majority of Federal Reserve officials announced that it would be “appropriate” to end QE4 prior to the end of 2013 or by the end of 2013. 

So, what the heck happened to 6.5% unemployment? 

The Fed, for almost 100-years, has operated with two mandated objectives, namely stable prices and full employment. 

In order to achieve those goals, they can control short-term interest rates through the purchase or sale of treasuries. 

There has also been another weapon at the Fed’s disposal which is not usually discussed, and that is the spoken word. 

Alan Greenspan took Congressional appearances to a whole new art form that some dubbed “Greenspeak.” 

Given the economic intelligence level of most legislators; it wasn’t difficult for “the maestro” to give a litany of double-talk and have the “folks” (an Obama term) from Congress say things such as, Mr. Chairman, thank you for coming, thanks for clarifying, and have a real nice day.  Unfortunately, or fortunately for that matter, absolutely no one had a clue as to what Greenspan had just said. 

And now that Bernanke and gang have pretty much exhausted all their tools, they have reverted back to “Greenspeak” in the hopes that no one will really notice. 

The question arises, however, regarding the model the Federal Reserve utilized in order to determine that 6.5% was the ideal level to start reducing the balance sheet. 

Could it be that the Fed heads discovered that their model was flawed?  Were they told that the Bureau of Labor Statistics (BLS) would no longer manipulate the numbers, thereby confusing the model?  Or, did they just conclude that a change in strategy after 100-years was just a really bad idea? 

Someone should inform Helicopter Ben that the beauty of Alan Greenspan was due to Alan’s propensity to never be put in a corner, since you never really knew what he said. 

Bernanke, on the other hand, has delivered some very memorable zingers over the years: “no recession,” “national housing prices never go down,” and now, “a target of 6.5% unemployment.” 

It seems whether the Fed stops buying bonds or continues purchasing treasuries; the 6.5% unemployment comment will be relegated to one of Bernanke’s historical dust bins, very much like “subprime is contained.”

[DManA]

Nobody knows anything about the fed.

The duel mandate for full employment wasn't added until the late 70s.

The Fed, for almost 100-years, has operated with two mandated objectives, namely stable prices and full employment.

[shove_it]

Dueling mandates. Bulls-eye.

[DManA]

The Fed reminds me of HAL - given dual conflicting orders and runs amok.

[DManA]

The Fed reminds me of HAL - given dual conflicting orders and runs amok.

[CowboyJay]

This looks like Bernanke avoiding, or trying to avoid, the public coming to some inconvenient conclusions about current and past Fed policy. Number one being the ruse that there is some correlation between monetary expansion and employment. When you run the numbers, there’s just no ‘there’ there. So they’d lose a good part of their justification for QE and other expansionist policies that serve the interest of large Wall St firms and no-one else, often crosswise to the public good.

They’re also (the NY Fed in general, not just Bernanke) palpably afraid of an audit. I can’t say I understand why as most of their shenanigans are already more-or-less open secrets. I can only say it appears at this point there must be something REALLY interesting hidden under the rug over there.

The Evans rule never seemed anything other than a ploy to fake transparency to take some of the heat off Bernanke for continuing to inflate even against the majority opinion of the Board of Governors.

So maybe the move back to Greenspeak is just the Bernankster following the old adage: “If you can’t dazzle them with brilliance, then baffle them with bullshit.”?

[Oatka]

The Fed, for almost 100-years, has operated with two mandated objectives, namely stable prices and full employment.

Those are secondary - the Prime Directive is to save the banks - at all times and with all means - at the public's expense.

[lentulusgracchus]

I can only say it appears at this point there must be something REALLY interesting hidden under the rug over there.

Hmmmm .... anybody audited the gold in Fort Knox since about, oh, 1994, when Greenspan and the Bankster Cartel started pounding gold holders?

Let's get Ron Paul appointed as a special prosecutor, to look into Fed operations for the last 80 years. Let's see what pops out.

Now, there's one vivisection that would probably turn into an autopsy if the MSM broke ranks and actually reported what Paul was finding, so that the People could discover what had been done with their money, and in their name, for their supposed benefit.

And Helicopter Ben and Gargoyle Greenspan would wind up hanging from a big tree on the Washington Mall.

[CowboyJay]

Let's get Ron Paul appointed as a special prosecutor, to look into Fed operations for the last 80 years. Let's see what pops out.

I'd pay good money to watch that on CNBC or CNN. I really have become convinced over the last couple years that there's something smelly (beyond the shenanigans we already know they're up to) hidden in some mop closet at the NY Fed. It may be they're moving gold off the books, but I think it's probably more along the lines of colluding to rig markets for ibanks through backdoor monetary actions. Then again, it may be that they knew for sure they were cooking up a housing bubble and had pre-arranged gov't intervention to leave taxpayers holding the bag.

Whatever it is, it's becoming pretty clear that if it came to light, they know they'd have a public scrap on their hands to keep from being disbanded.