Janet Yellen approved by Senate Banking Committee, 14 to 8


My wife and I paid cash for everything, including cars and house. I worked and paid for my education. I believe half of my neighbors’ homes are all paid for. Your lenders only drove up the price of everything.

Oh, and my family came to the states with nothing.


This puts me to mind of a woman I know. Her father was, for the time and place, considered wealthy. He died unexpectedly when she was a teen. He left trusts in place for his wife and for each child. This woman’s trust was $100,000, which was considered a princely sum back then. The income would fully support a person. She and her family lived very well.

A few years ago I had occasion to talk to her. She still had her trust, and it was exactly $100,000. The income wouldn’t pay for much of anything now.

Inflation is a hungry rascal. It’s a de facto tax on money that is not “risked”.


When my wife and I were looking for a house many years ago, we put a bid on it at $47,000 cash, only to find out that someone who borrowed money (interest then was around 10%) got the house for $48,500. Today with all the lowering of interest rates and other gimmicking that house is probably in the $250,000 ballpark. Same house except it depreciated some 40 years, and it’s more unaffordable than ever.

The real kicker in all this is for all we know, the guy with the loan who beat us for the house could have easily used our deposit in the bank to procure his loan.


Sometimes, when saving is as severely penalized as it is now, people don’t spend instead of saving; they just start hoarding in anticipation of bad times ahead. This is particularly true at a time when the percent of the working population actually employed has declined and seems stuck compared to higher rates previously. Even corporations are hoarding.


Obvious the Fed wants to encourage investment with 0% interest rates. But there are too many problems with this.

  1. The economy is in a hole and businesses don’t know when it will get better. The unpredictability of the current Administration really doesn’t help the situation.

  2. By having interest rates so low some who would be saving money are in fact hoarding it. So the result is that there is less money saved for future investment in addition to the lack of investment at the present.

  3. The Fed is pushing on a string and we all know it. If they wanted to encourage investment they’d be better off with sticking to rules so that businesses know what to expect, or at least use a less radical stimulus policy.

  4. Money is transferred from the poor saver to the rich risk taker who got us in this mess.



I fear it might be much worse than that. If interest rates rose, would the government be able to continue paying the interest on its debt as well as all the things to which it has committed itself?

It’s possible the fed is simply staving off default, pending some kind of economic improvement. But the administration keeps doing things to discourage economic improvement. So where do we go from here?

Since there seems to be no long-term thinking in Washington at all, perhaps the general thought is that the government will rake in a lot of money if the market falters and everybody heads for the door. Some will take losses, but there will be a lot of gains in it.
It would be a terribly stupid “remedy”, but who would accuse the government of wisdom?


The malekanoms bears seem to do a good job of explaining the Fed




Conservative group urges senators to vote against Yellen

Heritage Action, a conservative group that was active in pushing for the effort to defund Obamacare, on Monday said it was labeling a “no” vote on the nomination for Janet Yellen to lead the Federal Reserve a so-called “key” vote.

By making it a key vote, it means the Yellen vote will be used on the scorecard of the organization — making it especially important to senators facing a challenge in a Republican primary.

Heritage quoted a 2010 warning when Yellen needed to be confirmed as vice chairwoman to the Fed. “With a new flock of doves winging their way to the Fed, inflation worries have only gotten worse,” Heritage quoted its own J.D. Foster as saying.

Never mind that Foster’s warning wasn’t prescient: the Cleveland Fed’s latest estimate of 10-year expected inflation is just 1.72%.

Heritage also took umbrage with Yellen’s comment that she will use the Fed’s expanded powers to “level the playing field” between large banks and small.

In any event, now that the Senate has invoked the so-called “nuclear” option, senators won’t be in a position to block the Yellen nomination with just 40 votes, meaning Republicans would have to find Democrats willing to join them. They have won one Democrat to their side, West Virginia’s Joe Manchin.

However, in the Senate Banking Committee, Yellen’s nomination won three votes from Republicans — Bob Corker of Tennessee, Mark Kirk of Illinois and Tom Coburn of Oklahoma.

It seems that those Democrats who voted against Bernanke last time should have more reason to vote against Yellen. I can’t figure it out.


Senate confirms Yellen as Fed Chair

I believe this is the lowest number a Fed Chair appointee ever received on Senate confirmation.

Where was the filibuster?


She’s Big Ben 2.0


If memory serves me well, right after Paul Volcker was appointed, the economy stalled. Right after Greenspan got appointed, the market crashed big time, as did after Bernanke as well. Maybe today the market approves but don’t let that fool you. And when the market tanks this time, she’ll be caught in another liquidity trap, worse than Bernanke’s if that’s possible.


There was a running joke in the Economics department at my university when the FED implemented QE4, they called the FED economic plan QE Infinity. Most economists at my university poke fun at the FED’s economic policies, all except one economics professor who thinks the FED is needed and does a good job. Not surprisingly, she’s from a former Soviet Bloc nation and doesn’t understand America’s obsession with guns.

A couple years ago there was a bill floating through my state legislature about allowing concealed carry on public universities. There was a big article in our school newspaper about it. There was a big blowup in her class about it with people arguing and yelling at one another and she went on a rant about Americans and their obsession with guns. I told her straight to her face that maybe if the people in her country was armed then they wouldn’t have been oppressed by the Soviet Union. Needless to say, she didn’t like me too much after that. I did get an A in her class though, she couldn’t deny that I knew my Economics.


Other than Social Security and pensions from employment, what else is there?

I know a lot of retired people who have only SS and the income from their investments. If they invested in “safe” investments like savings account or bonds, they’re losing ground, and no question about it. That’s why you see all those ads for “reverse mortgages”. Those are for otherwise middle class people at the end of their financial rope.


Those reverse mortgages only stick your heirs with the debt.


They also provide some much-needed work for Robert Wagner and Henry Winkler.


Also to ex-Senator Fred Thompson. Anything to stick it to the heirs, who now have to find a buyer for the house or take out their own mortgage on it once the owners die. Except they don’t tell you this on the commercials.


Ha! True.


Sometimes the heirs just walk away rather than take on the debt. I have seen that. Since FHA guarantees repayment to the lender, the lender doesn’t particularly care if they do walk away.

I realize some retirees are in a bad way, financially, and resort to this device. But other than a desperation measure, there’s not much to recommend reverse mortgages.


DISCLAIMER: The views and opinions expressed in these forums do not necessarily reflect those of Catholic Answers. For official apologetics resources please visit www.catholic.com.