Thursday, April 3, 2014

Yellen on US Economy

by Pivotfarm

Surprise, surprise! Federal Reserve Chair Janet Yellen stated on Monday 31st March that the Federal Reserve shall have to continue bolstering the US economy while it remains stuck in the rut of economic slump. Just as well she made the statement yesterday and not today, as everybody would have taken it for an April Fool’s Day prank…or she would have ended up with egg on her face.

Yellen stated (at the 2014 National Interagency Community Reinvestment Conference, March 31st) that the conditions for the labor market were tougher today than at any other time in any other recession. Of course, she would say that in exoneration of responsibility of the role of the Federal Reserve and the US government and their apparent lack to get the US economy moving despite spending immeasurable amounts to bolster the banks and inflate the stock markets. She spoke of the “extraordinary commitment” of the Fed. But, me thinks the lady has not understood. We don’t need commitment, we need action and results.

She spoke of the economy being far from where it should be right now and that the expectations of the Federal Reserve were failing to come to fruition. She said: “The past six years have been difficult for many Americans, but the hardships faced by some have shattered lives and families. Too many people know firsthand how devastating it is to lose a job at which you had succeeded and be unable to find another; to run through your savings and even lose your home.” But, again, it’s not compassion that we need, it’s action and results, once again. 
We have neither of those two and so all the compassion and understanding however (in)sincere it may be is of no good whatsoever.

But, it does have everything to do with spin-doctoring. The Federal Reserve has now moved into a new era of communication and the compassionate understanding Yellen is now story-telling her life away in the hope that the image changes for the Fed and the people get some spin on them and change opinion.

The Fed has rolled off some $3 trillion in easy money. Interest rates are nearly non-existent and have been for five years. She even said that “recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics.” Feels like? It’s far more than just a feeling.

There are 7 million people working part-time according to her figures in the US and that would like to have a full-time job. Labor-force participation is down from pre-2008 levels of 66% to today’s level of 63%.

Ben Bernanke was economically condescending. Janet Yellen is now on her road-trip around the US visiting schools and talking about people she uses as endearing examples of the weighty burden of the economic crisis to show just how much she cares for the people down below: “For Dorine Poole, Jermaine Brownlee and Vicki Lira, and for millions of others dislocated by the Great Recession who continue to struggle, the cause of the slow recovery is enormously important.”

I wonder who will be shouting out “April Fool!” today when they look at the sorry state of affairs that the Federal Reserve is in and has got the people into! Is Janet Yellen the April Fool? It certainly looks as if Ben Bernanke stitched her up ‘good and proper’ by handing her the hot potato of the resolution of theQuantitative-Easing problem. There’s no chance of doing anything except making the people laugh, Janet. You’re not going to get yourself out of what Ben got you into. Anybody could have seen that. Still, you must have seen it coming. Keep the printing presses rolling, especially now that the European Union’s ECB is starting to fire up its own printing presses as they fall into deflationary pressure and stop spending. Or, maybe all of this was just a sad joke that the Federal Reserve wanted to play on the world today. Not funny!

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