In essence, despite a zero interest rate policy that mainly helps the wealthy; struggling families with falling incomes ought to take steps to accumulate "considerable assets," as retirees take part-time jobs to make ends meet. Let them eat cake, indeed.
It is utterly disgusting what the “Elite’s” think about the average person. Many of you might remember Leona Helmsley who will always be remembered for one of the most arrogant statements ever uttered: "We don't pay taxes. Only the little people pay taxes." That’s the attitude of the super-wealthy towards the humble masses. We’re the little people and they’re the kings and Queens of the kingdom.
While this is nothing new; as throughout history European nobility has always looked down on the peons…one doesn’t expect to hear it from our so called “leaders.” Yet what we saw come bubbling out of Janet Yellen’s trap last year is nothing short of “let them eat cake”. I’m surprised that more folks hadn’t jumped all over her statement.
The following is a short piece from the ECRI, which is the ECONOMIC CYCLE RESEARCH INSTITUTE. This is a pretty sharp bunch, and often does really good economic cycle research. This is what we found on one of their pages the other day…
According to the Fed's triennial Survey of Consumer Finances, the top 10% of U.S. families are doing just fine, and those in the bottom fifth are essentially being kept afloat by transfer payments; but the inflation-adjusted median family income has shrunk by one-eighth since 2004. Quite simply, middle-class incomes are being gutted.
Citing that same survey, Ms. Yellen expressed concern about "lower-income families without assets" that "can end up, very suddenly, off the road." She therefore advised families to "take the small steps that over time can lead to the accumulation of considerable assets." She did not, however, explain how they were to accumulate these assets, in light of falling incomes and zero interest rates.
This uncomfortable disconnect between theory and reality also came out during her Senate confirmation hearings last fall. Given the predicament of "the little person out there who is just trying to pay the bills and maybe put a buck away for retirement," Ms. Yellen was asked to "explain to the senior citizen who is just hoping that CD will earn some money" the impact of "a policy that says, for as far as the eye can see ... keep interest rates low." She replied: "I understand ... that savers are hurt by this policy, [but] savers wear a lot of different hats... They may be retirees who are hoping to get part-time work in order to supplement their income."
In essence, despite a zero interest rate policy that mainly helps the wealthy; struggling families with falling incomes ought to take steps to accumulate "considerable assets," as retirees take part-time jobs to make ends meet. Let them eat cake, indeed.
There in a nutshell is the hubris that is indeed our ruling class. To sum up what they really think, it would go like this…”Okay sure, some of our policies might be crushing the elderly on fixed incomes, yeah we get that. But they can always crawl down to Wal-mart and be a door greeter for 8 bucks an hour. We can’t take the risk of letting one of our precious banks fail, or CEO’s go without their multi million dollar bonus because some poor schlep is having a hard time paying the bills with his 1% CD.”
And there it is. If the truth could ever bubble forth from the mouth of any of these perverted Central bankers, that’s exactly what they would say. They don’t care about you, they despise you. They care about themselves and their precious banks. Money, money and more money is their God.
They will lie on their mothers grave with their hand over their hearts singing the pledge. They disgust me.
Consider their incredible “reversal” in stance from just a couple weeks ago. When the market was hitting all time highs, Bullard and his Federal Reserve cronies were out talking about interest rates rising sooner rather than later. They were “all in” on removing QE because everything was so great. But as soon as the DOW peeled off 1000 points they were incredibly fast to rush out and suggest that maybe ending QE should be delayed. Why?? Did the economy change that much in two weeks? No, of course not. The only thing that changed was that stocks were going down instead of up, and in this day and age, that’s against the law.
So I ask Mr. Bullard and the rest of those criminals…are you basing monetary policy on the fundamentals of the economy, or on the height of the DOW??? Well we all know the answer. Keeping the 10%’rs rolling in easy stock market gains is of the ultimate importance. The middle class can fade to oblivion as far as they’re concerned.
But that said, I’m sticking to my statement that the Fed’s are not going to come in and restart QE. See, right now they don’t have to. All they have to do is talk about it like Mario Draghi has been doing in Europe for almost 2 years. Every time they mention extending QE, the market will salivate and soar on the hopes of more free money. It really is disgusting to watch, but then again…that’s the game now in 2014. Forget fundamentals, they went out with the Mullet hairdo. Today it’s all about manipulation, leverage, buy backs, pro-forma accounting, ex-item accounting, QE, CLO’s, Covenant lite, Mortgage/rental/solar backed securities and a host of other exotic junk. Debt to create debt to create more debt to be packaged and sold as “investments”.
Meanwhile McDonalds can’t make their earnings. IBM can’t make their earnings despite multi billion dollar share buy backs. Coca Cola can’t sell their sugar juice, NCR, EBAY, Chipotle, Verizon, and dozens of others have missed, warned or both. Yet the S&P is up over 100 points from last weeks lows, all because of jawboning from the Fed’s about more QE.
So this is what we can expect for a few months. The Fed’s still haven’t found the right “disaster” they can blame the ills of our economy on, so until they do, each time the market wobbles they’ll rush out their talking heads to suggest a new round of QE is right around the corner. The saddest part is that it will work for a while too! All the Fed’s need to know is what particular buzz words the high frequency trading robots are programmed for and they can make this market dance like a stringed puppet.
This will lead to more volatility. As the market fades, they’ll talk about QE and send it back up. But as we’ve seen lately, this market doesn’t move in chunks of 20 or 30 points any more. Now the DOW moves in 200+ point drops and pops. Now the S&P moves in 20+ point leaps, and that’s wickedly volatile.
Oh and as far as people “calling them out” on it, forget it. These are the elitists and they can do any damn thing they please. Rules and other such annoyances like taxes are for the little people. Or as Yellen says “people that wear a lot of hats”. They can manipulate the market all day long and no one’s going to bust them for it. As long as stocks go up, they get no pushback.
From the intra day bottom on Oct 15th the S&P is up over 100 points. Think about that for a minute. Years ago the S&P wouldn’t move 100 points in an entire year and now it does it in 5 trading days. But beware of that volatility. One of the age old market adages is that when a trend that has been in place for a long time is coming to its end, the markets get really whippy. Well down 260, up 280, down 300 back up 200…is really whippy. It’s not normal and it probably does signal a change is in the wind. These next few months are going to be incredibly interesting. Stay tuned.