Janet Yellen…Snake Oil Saleswoman?

The article below was written in another publication back in 2012 when Ben Bernanke was still running the Fed.

I searched for it while listening to Janet Yellen discuss the Fed decision-making process because in many ways it reminded me of listening to Ben Bernanke do the same.

Let me know your thoughts on whether you agree or whether you believe that Janet Yellen has a firm grasp on what she is doing now and for how she will unwind it all at some indeterminate point in the future.

Ben Bernanke: Snake oil salesman!

Watching Ben Bernanke answer questions regarding the Fed interest rate decision am I the only one who thinks he sounds as if he is just throwing s–t against the wall hoping that something will stick!

(While the lemmings (business news pundits) in his audience just seem to listen and nod)

To date the aforementioned s–t that I speak of has been comprised by QE1, QE2, QE3, Operation Twist and whatever name they give to his announcement today.

And so far, nothing has worked typified by an unemployment rate that drops only because people have lost hope and have given up looking for work!

Watching his press conference I am reminded of “that” salesman who tries every gimmick and plays every angle in order to put as much into his pipeline as possible hoping all will close when in reality very little of it ever will.

Ben Bernanke is that salesman who is expanding the Fed balance sheet to a point at which it will be impossible to reverse and yet, nothing in the economy actually seems to substantially improve when you scratch below the surface of the numbers.

At the same time government borrowing spikes higher with treasury debt outstanding now at a point where the country cannot afford to pay for it without borrowing more money simply to service the interest due bondholders.

And to a large extent, these bond buyers are actually the federal government itself!

Sufficiently confused yet?

Now imagine for a second the impact on federal spending dedicated to debt service were yields ever to revert to historically “normal” rates.

Therein lies the Fed Chairman’s true quandary. He warns us about the dangers of Washington kicking the can down the road when it comes to “solving” the fiscal cliff but as politicians will, that is exactly what they will do.

Bottom line – Ben Bernanke is an academic who will continue to try his Ivory Tower methodologies to get us out of the mess that we are in, and we can only hope that he is better in the future than the unmitigated failure that he has been in the past!

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Michael Haltman, President of Hallmark Abstract Service, New York.

HAS is a provider of title insurance in New York State for residential and commercial real estate transactions specializing in the areas of New York City, Long Island and Westchester.

For anyone either buying a property or refinancing, remember that although your attorney will likely recommend a title insurance provider, you always have the right to choose your own title company (click here to learn more)!

If you have any questions you can reach Michael by email at mhaltman@hallmarkabstractllc.com.