June 22, 2016
Fed’s Yellen: US economy faces ‘considerable uncertainty’ … Federal Reserve Board Chairwoman Janet Yellen testifies before the Senate Banking, Housing and Urban Affairs Committee on June 21, 2016 in Washington on June 21, 2016 … Federal Reserve Chair Janet Yellen warned Tuesday that the US economy faces “considerable uncertainty” from slower domestic activity and from a possible British vote to break with the European Union. -Yahoo
Here’s a question: Why is the Senate listening to Janet Yellen about the economy?
It’s like the blind leading the blind.
The Senate has no idea what’s going on with the economy.
Neither does Yellen.
She was wrong about hiking rates. She was wrong about the direction of the market. And she’s been wrong about the economy as well. It’s going down not up.
The US is in the midst of a kind of depression.
And there’s no one economy anyway. The economy is made up of tens of millions of people. To generalize about them may be feasible but not necessarily accurate.
Pointing to dragging hiring and business investment recently, and to the risk that a pro-Brexit vote will send shock waves through global markets, Yellen signaled that the Fed has become less optimistic about US growth over the short term and will proceed with great caution on plans to raise interest rates.
She said in testimony to the Senate Banking Committee that US growth has picked up noticeably in the second quarter from the sluggish pace at the beginning of the year. Nevertheless, she said economic growth has been uneven and clear downside risks remain a threat.
This all sounds like gobbledygook to us. She says one thing and then she says another.
She has no more idea what’s going on than the Senate does.
No doubt she was accorded a respectful hearing and provided a cold beverage of her choice.
She was visiting Congress to present her semi-annual testimony on the state of the US economy and Federal Reserve monetary policy.
Reports indicate that every time she made a statement she qualified it by saying the opposite.
On recession, for instance: “She rejected predictions that the US faces a possible recession this year.” But here is her subsequent quote:
“I don’t think [recession is the] most likely case, but we just don’t know what will happen.”
No she doesn’t know what’s going to happen.
And neither do others on the Fed Board or Congressmen themselves.
Is it too much to ask to get rid of the Fed? Just jettison it.
Yellen doesn’t know what she’s talking about, nor have her predecessors.
The only thing central banks can possibly do is damage economies by setting real interest rates too low or too high.
And make predictions that are never accurate.
In fact, central banking doesn’t work because it is impossible to make accurate predictions about the future, especially when it comes to the economies of industrialized states. There are simply too many factors.
Conclusion: The most accurate statement Yellen could make is that she doesn’t know what’s going on with the economy and will never be able to know. Then she should suggest disbanding the Fed before it does further damage. This would be the most accurate statement she could make.