At the announcement that Ben Bernanke was retiring from his post of Federal Reserve chair, who would have thought that his replacement would be someone more extreme? With his recently acquired political impotence, Barack Obama, in his infinite wisdom, gave up his first choice Larry Summers and yielded to Wall Street to appoint Janet Yellen. To call Yellen dovish would be like calling Shaquille O’Neal a large fellow.
Bernanke, who has blown up the Fed balance sheet approximately five-fold, talked recently about slowing down the money printing (tapering asset purchases), but Yellen, in her appearance before the Senate, said we have to keep aggressive policy until the recovery materializes. That means, “Oil up the printing presses.”
Wall Street is sold on Yellen. She will keep the punch bowl full and continue blowing up the stock market bubble. The question is “What if the recovery is a long ways off, or worse yet, is not coming at all?” This administration seems to have blind faith that its policy will work without any thought of a Plan B.
The administration did it with Obamacare, and now it’s doing it with the economy and the world standing of the U.S. dollar. It’s essentially are throwing us out of an airplane with no parachute, only the faith that the man with the parachute will get there before we hit the ground. I think they have seen too many Hollywood movies.