Yellen's Denials About Inflation Will Curb Fed's Independence

by JASmius

On the one hand, I'm not sure how Paulnuts would look at that possibility.  They want the Federal Reserve audited at minimum, and ultimately abolished.  As I've never subscribed to the Jacksonian (and more than a little paranoid) "Illuminati/Trilateralist/Bankers' Conspiracy" school of thought, I've never ventured any particularly strong opinions on the matter.

Besides, everybody knows that the Syndicate was wiped out fifteen years ago.



No, my friends, I've always seen the Fed as having one mission, and one mission only: supporting and bolstering the value and integrity of the U.S. dollar.  Not macroeconomic tinkering, not "pump-priming," not massive debt-facilitation, but keeping the lid on price inflation.

And that is precisely what Fed Chairwoman Janet Yellen does not want us to know that she isn't doing:

Testifying before Congress, Federal Reserve Chairman Yellen cherry picked data on inflation by noting prices are up, on a year-over-year basis, less than the Fed's target of 2%.

The Labor Department's consumer price index has accelerated since March and was up 4.2% in May. Tuesday, it will release June data that will perhaps not be quite so high, but it likely will show inflation continued above 3%.

Once inflation gets out of control, history has shown it is difficult to contain without a steep and painful recession. Recognizing these dangers, Yellen's cognitive dissonance will add new life to proposals in Congress to rein in the Fed's independence.

Picture another "steep and painful recession" in the midst of an already-existent permanent depression.  We're talking soup kitchens/selling apples on street corners/Grapes Of Wrath territory.  We're talking Third World-magnitude economic calamity.  The perfect historical bookend to FDR's first Great Depression.  And another "Mission Accomplished" banner to hang in the "O"val Office, for what it would allow Barack Hussein Obama to do next.

And don't forget what happens when out-of-control inflation can't be contained.  Hyperstagflation, anyone?

A bill under consideration would require the Fed to submit to Congress a detailed strategy or rule for the Fed's policy instruments — for example, targets for money supply growth, lending rates to banks — and essentially handcuff quick Fed responses to emerging crises.

Actually, the problem here is not that the Federal Reserve has too much independence; it's that it doesn't have enough.  Remember, folks: In the Obama Regime there is no such thing as "independence".  Janet Yellen takes her orders from Barack Obama, just like the supposed-to-be-independent Attorney-General Eric "The Red" Holder does.  And those orders are to debase the dollar so as to keep the trillion-dollar-a-year borrowing crazy train careening down the fiscal tracks.  Because as soon as interest rates finally start edging back up - with or without "Old" Yellen's input - the deficit will explode another several orders of magnitude and the debt along with it, as will private debt, the financial markets will panic (again), and, well, we saw the dress rehearsal for this sort of thing six years ago, didn't we?  The crisis the Democrat Party created and exploited to put Red Barry in power in the first place, along with that Donk SuperCongress, to begin the final stages of "fundamental transformation" of the now-defunct American Republic.  And now we're headed for another, even bigger crisis that would, at the very least, finish the job.

But putting the Fed under direct congressional supervision?  I dunno.  It sounds so constitutional, but as has been said before in other contexts, the Constitution is not supposed to be a suicide pact.  Heck, right now the Fed is already under direct Executive control, and look how that's turning out.  I can understand the impulse to "do something," but this bill requiring the Fed to submit to Congress a detailed strategy or rule for the Fed's policy instruments has all the look and feel of making a bad situation worse.  As would, in all likelihood, the Fed's abolition.

I'm afraid, gentles, that there's just no substitute for voter vigilance.  We're looking at burgeoning inflation, being carefully nurtured and husbanded by the Fed, because We, The People elected Marxist-Alinskyist "commie-bastards" to positions of near-total power over the American economy.  And, just as we are being forced to watch helplessly as the world burns, so we have little recourse but to witness the slaying of the proverbial "golden goose".  We can only hope, and pray, that a President Scott Walker and a Tea Party-ish Congress can dig us out of the wreckage - and that we'll even get the chance to elect them.