Meet the New Fed Chairman

in news •  last year

by James Corbett
corbettreport.com
February 17, 2018

Paul Volcker began his term as chairman of the Federal Reserve Board of Governors in August of 1979. In October, the S&P 500 index dropped 11% on its way to a 20% drop in 1980.

Alan Greenspan was sworn in as Fed chairman in August 1987. On October 19, 1987 the markets suffered through "Black Monday," a devastating sell-off that saw the Dow Jones lose a record 22.6% in a single day.

Ben Bernanke became chairman in February of 2006. In May of that year, the markets stumbled through a 7.8% sell-off on the rocky road to the Bear Stearns and Lehman Brothers meltdown.

Janet Yellen began her term as Fed chair in the midst of a market sell-off that ultimately saw the S&P drop 5.4%. The sell-off resumed in September, with a further 9% drop on an intraday basis from mid-September to mid-October.

For decades now, it has been an iron-clad rule: Every incoming Fed chair will face market turbulence or a major crisis shortly after taking office. But, to use the parlance of the internet meme generation, Yellen's newly-appointed successor at the helm of the Fed, Jerome "Jay" Powell, may have been heard to remark "hold my beer" before assuming the chair.

On Powell's very first day on the job earlier this month the markets began a flash crash, with the Dow down a staggering 1,500 points at one point before paring back some of those losses. This led to the extraordinary situation of Powell being labeled the "most disliked Fed chair ever" a mere three days into his job. Talk about trial by fire.

But as quickly as the rug was pulled out from under the central bank funny money-blown bubble economy, normalcy returned to the markets. And by "normalcy" I mean the "new normal," aka "EVERYTHING IS AWESOME!" As I write, global stocks are having their best week in six years and the sky-is-falling panic of the past two weeks is so...well, last week!

So I guess everything's tickety-boo with the economy after all and Jay Powell, having been associated with the market sell-off, will now be associated with the market "recovery," right? And now back to business as usual...

But wait. Who is Jay Powell? What's his background? What's his position on monetary policy and what can we expect the Fed's Board of Governors and Open Market Committee to do during his tenure?

If you saw any of the "WTF? Who is this new Fed guy and why is the market crashing?" coverage that the MSM trotted out earlier this month, you will have learned a few tidbits about Powell. Namely:

  • He's been a governor at the Fed since 2012.
  • He is not an economist (breaking a four decade tradition for the position).
  • He's one of the richest men to ever become Fed chair.
  • He worked at the "Bipartisan Policy Center" for a number of years and served as Assistant Secretary of the Treasury under "Poppy" Bush.

Etc., etc., blah blah blah.

Wait...what? One of the richest men to ever become chairman? He has an estimated net worth in the tens of millions? How did that happen?

Well, one thing that every one of the talking heads was anxious to blow past in Powell's CV is that he was a partner at the Carlyle Group from 1997 to 2005. Yes, that Carlyle Group. Yes, during 9/11.

I suppose this is the point I could just do the metaphorical mic drop and rest my case, but let's dig a little deeper into this market chaos and what's really going on as the Fed undergoes its facelift.

The first thing to note about this latest market turmoil (and "recovery") is the point I have been making over and over and over for the past several years; namely, that the "new normal" of the central bank-dominated post-Lehman economy is a reality inversion bubble. "Bad" economic news is great economic news and "good" economic news is terrible economic news.

Why? Because when the markets get hit with bad news it means there's a higher likelihood that the Fed (and/or the ECB, the BOE, the BOJ or another central bank) will spike the punch bowl to keep the good times rolling. Need more stimulus? Here you go! Markets not reaching record highs? We'll start investing directly! Interest rates still not low enough? Fine, we'll take them negative!

Conversely, when good news comes, it means the central banks might try to take the punch bowl away. If the government's cooked books show lower unemployment or higher economic growth, then they might try to reduce stimulus or even jack up rates, so markets plunge.

This led to the situation I outlined here last month where Bank of Japan Governor Haruhiko Kuroda hinted at the idea that the BOJ may be ready to start easing off on the stimulus gas pedal...and the markets threw a fit. Lesson learned. Now, Kuroda (recently securing a second term as Governor) is saying that talk of winding down the stimulus might be a bit premature, and the Japanese market is perking up accordingly.

So, black is white, up is down, and the only common denominator is that central bankers control our economic reality by deciding how much stimulus money to inject into the junkie...or how much to take away.

The take away of this story is that the central bankers, Bernanke and Yellen chief among them, have painted the global economy into a corner. If economic activity starts to pick up and we enter an actual recovery where workers gain full-time jobs and higher wages (as opposed to the phony baloney "jobless recovery" of the past ten years), then rates are likely to rise and inflation is in the cards. That is to say, good news is bad news.

Well, guess what? We've had a whole lot of good economic news lately. Whether it's the recent uptick in PMI, or reports of Apple repatriating $350 billion to the US, or stories of higher bonuses and wages due to the new tax bill, things haven't looked this rosy for a long time.

And it's not just a US phenomenon. Japan has posted its eighth straight quarter of GDP growth for the first time in 28 years. PwC's annual survey of business executives in the UK shows almost unanimous confidence in economic growth over the coming year. Heck, the entire world is in a pocket of growth and optimism; for the first time since the financial crisis, every one of the world's major economies is expanding at once. Let the good times roll?

Oh wait. There was a positive January jobs report in the US? That means the Fed is going to raise rates four times this year! Quick! Sell off!

No, hold on. This is turning into a bloodbath! Great, maybe the Fed will ease off on the rate hikes! Time to buy the dip!

Are you getting motion sickness yet? Well, buckle in, because this is just the start of the market volatility we're likely to see as this recovery(?) really kicks in. And, because we are in this Alice in Wonderland economic universe now, it's entirely possible that actual global economic growth will pop the everything bubble that the central banks have spent the last decade inflating.

So, back to Powell. Where does he fit into all of this?

Well, here's one way to look at it: Yellen was a Democrat and she is the first Fed chair in the modern era to make it through her first term without being reappointed. Trump made it clear on the campaign trail that he was not a fan and would not be renewing her appointment, and, true to his word for a change, he has swapped her out for lifelong Republican Powell. If you're a believer in the left/right political paradigm myth, feel free to insert your own conspiracy theory about how the Dems have set up the GOP to take the blame for the popping of the bubble they blew, and feel free to use Yellen's parting shots at the economy as your evidence. But of course to make that theory work you'll have to disregard the fact that it was Bush-appointee Bernanke at the helm for the Lehman crisis and the blowing of the bubble in the first place.

Alternatively, if you believe that a super secret government insider is posting on 4chan under the name "Q" and spilling the totally super real goods about the secret battle between the valiant, crusading Trump regime and the evil deep state that they're definitely not a part of, then feel free to insert your own conspiracy theory about how the deep state is looking to take down Trump with an economic collapse.

Personally, I do believe that the deep state has been plotting its out from the central bank-dominated reality inversion bubble for a long time, and Powell may just be the chump who gets left holding the bag when the doodoo really starts to hit the oscillator. (He lost the game of musical chairs, you might say.)

But as gloomy as all of this might sound, there's actually a positive side to all of it. As Ron Paul points out in a recent edition of the Liberty Report, there are signs that the rug is being pulled out from under the Fed...but not by the deep state. Instead, Dr. Paul points to the explosion of bitcoin and crypto as a sign that people are scrambling to get their wealth out of the failing fiat paper dollar paradigm. Other signs including the growing number of states that are tabling laws to encourage the use of silver and gold as money.

As always, the people know that the markets are rigged, that the dollar is a paper promise with nothing to back it up, and that the central bankers and their financier cronies are not the "Wizards of Wall Street" but the "Wizard of Oz," i.e., little men behind a curtain desperately trying to distract the public with their hocus pocus parlor tricks.

So, yes, it's very possible that the dollar could fall and the economy of tomorrow will look nothing like the economy of today. But maybe that's a good thing. Once again, it depends on what steps the public is taking to prepare for that future, and whether they are going to stumble blindly into the next economic paradigm or actively seek ways out of the central bankers' trap.

So, welcome to your new position, Jay Powell! Good luck keeping that whole Federal Reserve charade going! You're gonna need it...

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

He is a Jesuit. Must be said. The Vatican sits at the top of the New World Order and this is their Knight's Templar banking system.

It's so hard to root out systemic corruption, let's hope that ppl start discussing these issues soon. So many times politicians have made decisions not in the best interest of the people.

The fed, like the creature it is (from Jekyll Island you can say) will probably strike out like as a wounded animal would if attempts are made to bring it down.

You can already see them doing this in attempt to either bring down or control crypto currencies. You can also see this in how (through large banks in their system ) they keep gold and silver from moving as it would normally otherwise do. Lastly you can also see this in the bank policies that continue to Ben implemented that are geared towards moving into a cashless society.

Having said all this, the best (and I believe only) way that as individuals we can win against these fake wizards is to not participate and or be contrarian to what they try to push us to.

  1. Use cash
  2. Use crypto
  3. Gold and silver
  4. Do not feed their vaults with you money

Anyway...thanks James for another enlightening rundown of what really going down in fed-land.

·

The problem is that this fake fiat money can make huge swings in the real money you are referring too. The bad iquys can effectively control the market because they have huge amounts of this fake printed money.

heck, maybe it's true that on the grand scale of things.... the world will move on, more or less, regardless who is the president/politicians. So if we can take Triumph as the president, Jay Powell is just a piece of cake.

Most excellent report, as always. Thanks a lot for all this education and great information package. As one thing, I was not aware of the flash crash that occurred on 5th. This is yet another sign of the weakening of the fiat dollar and, especially the US dollar.

Namaste :)

Meet the new boss, same as the old boss...

Dear James,

JC.jpg

I am not really sure if you read all these messages and will see mine, but I just wanted to thank you for all your devotion and hard work over the years.

I have added you on my HEROES OF TRUTH wall of fame list.

__HEROES_OF_TRUTH-wURL.jpg

Keep up the fight!

Maybe President Trump chose him because he is not an economist; therefore he does not have the traditional indoctrination of economists, rather a different perspective and different ideology. Just a thought. Time will tell.

I actually do think the next crash will be a good thing. People do need to be prepared and become as self sufficient as possible. Unfortunately, so many people have no idea it's coming.

·

The whales control the market and the world!!!

I like what Max Keiser calls BitCoin "the asset black hole". I feel like he may be correct. A lot of folks are pulling their money out of their "normal" asset classes for crypto gains. That'll play a roll in tanking the market & building up confidence in cryptos. I know more than one gold bug who sold to get into crypto. I don't think we've seen the last of that mentality & no doubt 2018 will shape up to be a wild ride in finance. Thank you James @corbettreport for getting me my first BitCoin & motivating my family to put some of our savings into BitCoin...it's been very good for us, a poor working class family. Who knows, I just might be able to retire after all. Lastly... I wouldn't want to be the Fed. Chair as all this shakes out. I think it won't be good for fiat or Wall Street.

The fed, like the creature it is (from Jekyll Island you can say) will probably strike out like as a wounded animal would if attempts are made to bring it down.

You can already see them doing this in attempt to either bring down or control crypto currencies. You can also see this in how (through large banks in their system ) they keep gold and silver from moving as it would normally otherwise do. Lastly you can also see this in the bank policies that continue to Ben implemented that are geared towards moving into a cashless society.

Is the new char (boss) same as the old boss? We will see. Intriguing the connection to the markets falling when a new chair takes office. Yes it will be interesting to see what goes down under his watch. We also have Trump for whom i admire as pres. He is the king of debt. so perhaps he is there for a restructure job. Here is a poem I wrote about it all a while back.

DOW JONES CASINO
markets are being rigged and nothing is real.
Come down to the casino, we'll make you a deal
The bonds are propped so stocks may sour
the metals are uncool if you want to make more
So open your wallets and poor in some cash
and see how the markets will rise in a flash
I tell you my friend what goes up must come down
when the casino goes bust and your left with a frown.

Thanks for introducing him via this post, this news deserves to spread and let people know such informations.

Not much of a "paper promise" to these federal reserve notes. If you want to cash them in, all they'll give you is more federal reserve notes.

Thankyou @corbettreport for the insightful portrayal of the Flash Crash. Bretton Wood and its envisaged epoch of liquidated paper bills sustained plastic money euphoria since the new step was nothing beyond the purview of regulators. However, rise of crypto as a crazy market, anguish of growing world powers against petro-dollar and consequent assertion on the use of alt fiat as oil-liquidity, recurrent avowals of self-serving and alienating economic policies, shifting patterns of global finance, and new forms of dependencies would obviously be taking their toll on the established finance. Apart from the debilitating blows to the trust of investors in globally reckoned markets, green-back reliant developing part of the world would also bear the brunt of upheavals. Bracing for the future carries much more than investment decisionsAs now its about boarding some bandwagon

After reading the history of economic systems, depressions, recessions, manipulations of economies remind me of harvest time on our farm.

He is the first non- economist to head the federal that's really something new. And few say it is the safest pair of hands to head Fed... They say he is most grounded and trumps Strong card

Very good👍vote me @Bahrainisibaron

welll thanks for updating us from this newws really good

I'll be reading the Corbett Report from now on. You don't really predict anything, you just hold up a mirror (not Alice's mirror) and ask us to look. We're all in the boat and we are not at the helm. Whoever is steering this ship has an agenda, but that agenda may land us all, including the captain, in the brink. Thanks for an entertaining, informative and stomach-churning piece.

Meet the new bust, same as the old bust?

...then rates are likely to rise and inflation is in the cards.

This made me pause. May have to do with sentence construction. Since under a system of fractional-reserve banking, interest rates and inflation tend to be inversely correlated, correct me if I'm wrong but shouldn't I rather be reading then inflation is in the cards and rates are likely to rise? B.t.w., are the BOJ's interest rates still in the negative?

Didn't know about PMI, Carlyle Group, Powell's wealth, etc. Thanks! :-)

Poal valkar is a good person

Congratulations @corbettreport, this post is the third most rewarded post (based on pending payouts) in the last 12 hours written by a Hero account holder (accounts that hold between 10 and 100 Mega Vests). The total number of posts by Hero account holders during this period was 378 and the total pending payments to posts in this category was $9626.86. To see the full list of highest paid posts across all accounts categories, click here.

If you do not wish to receive these messages in future, please reply stop to this comment.

I don't think he'll have any worries about possible market turmoil under his "watch" - after all, he clearly made a fortune out of turmoil before.

Great post!

Excelente post, muy buena información.

That's right! Therein is the problem. We have gotten the economy (and society) so drunk on the punch that it is now an alcoholic. And rather then go through the period of withdrawals, the shakes and sobering up....just juice it up some more as we can not bare to have any kind of real draw down.

Last I checked though, isn't that what capital markets do. Correct when needed....or maybe that is free capital markets I'm confusing LOL.

Tolong bantu vote dan follow akun pemula kami @tgkakmal

I hope the fed dissappears in my lifetime

The dip was the music stopping, in their little game of musical chairs. Then the music started again to the glee of all the cronies.

Hope this one is different

Your Posts are golden.

Yeah. I think writing down might have its advantages as well as disadvantages too.

When writing, you might not really get to pit down everything in the head.
But then in a video or an audio, u can get to say everything that comes to the mind.
But currently, I do more of writing cuz I'm not all that pretty to appear on a video. Lol.

Thanks for sharing

news related to world economy and real truth about worlds best and leader'country soo bad. @corbettreport i am really desire to get all things in same way as many other wants it. but what we do? and what are our responsblities?

Your are welcome sir @JayPowell. Let's do some better than others.. wishing you best of luck✌✌
Thanks for the article sharing with us [email protected]

This is a woke post right here. It's 2018 are you ready for a new world order currency?!?!? (pic related) I feel like they will drop the fiat real soon, they pretty much printed all of the value out of it. The replacement's gotta be a crypto, I wonder which one it will be?

·
·
·

lol. Followed.

cool

good job...I think you'd like some of my market reports....same page you're on!

Ah yes, the hot potato that is the fraudulent US fiat ponzi scheme has been tossed in flaming fashion to the next elitist turd of a neoclassical economist. Wait, James, are you suggesting that there is a pattern of failure with the "noobs" who plop down on this hallowed throne? Hmmm, perhaps this incoming sycophant is merely just a signal to the market whales that "it is time to start withdrawing all the little fishes hard-earned 401k profits from the equities".

Wait, he has a personal net worth of "tens of millions"? Hold on, interesting....is this some sort of strange "financialization" of the stoic, soberly academic Fed Reserve post? If we are going that route, I think they should plop down that buzzer-smacking, mouth-incarnate, stock-market-reality-show host Jim Cramer!! Let's really throw down the hammer on "BUY AMERICA!" Inflation inside a gold-platted lambo to the moon and beyond.

Nice to see your post.realy good job.

Nice post beautiful presented and explained. detail oriented with nice blockchain information. thank you for [email protected] corbettreport sir

We can know many update news from your each blog That's why we can gather many information.
thanks
@resteem & follow done.