{"id":39868,"date":"2018-10-29T18:56:54","date_gmt":"2018-10-29T23:56:54","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39868"},"modified":"2018-10-29T18:57:08","modified_gmt":"2018-10-29T23:57:08","slug":"volcker-rebukes-bernanke-and-yellen","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39868","title":{"rendered":"Volcker Rebukes Bernanke and Yellen"},"content":{"rendered":"

Volcker Rebukes Bernanke and Yellen<\/a><\/h3>\n
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In his new book, \u201cKeeping At It: The Quest for Sound Money and Good Government<\/a>,\u201d by Paul Volcker (1979-1987) with Christine Harper, the former Fed Chairman delivers a sound rebuke to Chairmen Ben Bernanke (2006-2014) and Janet Yellen (2014-2018), and other Fed governors and\u00a0economists, for fretting overmuch about deflation.\u00a0 He argues that the true danger is that loose monetary policy leads to inflation and market contagion caused by the manipulation of risk preferences.<\/p>\n

Volcker specifically chides Bernanke and Yellen for their fixation on a two percent inflation target, one of the main ornaments on the data dependent Fed Christmas Tree. \u00a0\u201cHow did central bankers fall into the trap of assigning such weight to tiny changes in a single statistic, with all of its inherent weakness?\u201d he asks.\u00a0 Good question. Volcker writes in Bloomberg<\/a>:<\/p>\n

\u201cDeflation is a threat posed by a critical breakdown of the financial system. Slow growth and recurrent recessions without systemic financial disturbances, even the big recessions of 1975 and 1982, have not posed such a risk.\u00a0 The real danger comes from encouraging or inadvertently tolerating rising inflation and its close cousin of extreme speculation and risk taking, in effect standing by while bubbles and excesses threaten financial markets. Ironically, the \u2018easy money,\u2019 striving for a \u2018little inflation\u2019 as a means of forestalling deflation, could, in the end, be what brings it about.\u00a0 That is the basic lesson for monetary policy. It demands emphasis on price stability and prudent oversight of the financial system. Both of those requirements inexorably lead to the responsibilities of a central bank.\u201d<\/p>\n

Of course, Volcker is cut from different cloth than his\u00a0successors.\u00a0 Janet Yellen was only chairman of the Federal Reserve Board for four years\u00a0and with good reason.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Volcker Rebukes Bernanke and Yellen In his new book, \u201cKeeping At It: The Quest for Sound Money and Good Government,\u201d by Paul Volcker (1979-1987) with Christine Harper, the former Fed Chairman delivers a sound rebuke to Chairmen Ben Bernanke (2006-2014) and Janet Yellen (2014-2018), and other Fed governors and\u00a0economists, for fretting overmuch about deflation.\u00a0 He […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[68,16246,451,16888,5987,16244],"class_list":["post-39868","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ben-bernanke","tag-institutional-risk-analyst","tag-janet-yellen","tag-jerome-powell","tag-paul-volcker","tag-r-christopher-whalen"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39868"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39868\/revisions"}],"predecessor-version":[{"id":39870,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39868\/revisions\/39870"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}