Federal Reserve Chair Janet Yellen has said that she will not step down before her term expires. United States President-Elect Donald Trump, despite both his praise and criticisms, doesn’t seem to have any intention of firing her.
That doesn’t suit one former White House official and contrarian investor.
Speaking in an interview with the Fox Business Network, David Stockman, former Reagan economic advisor and bestselling author of “The Great Deformation,” urged the president-elect to get rid of Yellen as soon as possible because of the “massive market bubble.”
“She ought to be put out to pasture as soon as possible,” he told the business news network.
“Ask for resignation on January 20th because unless this bubble is lanced, there is a huge bubble in these markets, the Trump administration is never going to come out the other side. And he would be well advised to clean house, if you want to drain the swamp, the place to start is in the (Federal Reserve) building because where this entire false economy, this big fat, ugly bubble that Trump talked about during the campaign actually originates.”
He added that the Fed Chair doesn’t even understand that this is an immense bubble, citing the S&P trading at 25 times earnings and the Russell 2000 up 40% in the last year.
“So we have a Fed that has created massive distortions, total mispricing in bonds and stock markets. Very unstable bubble everywhere,” he said.
Although he is pleased that the U.S. central bank has decided to finally tighten, Stockman believes it’s nonsense that the Fed waited this long to take just a baby step.
“I’m not complaining about Yellen tightening. It is ludicrous we got 96 months before we got a tiny baby step upward. What I’m talking about is a Fed that is interfering, intruding so heavily in the financial markets they don’t work anymore,” Stockman averred.
The Fed raised interest rates on Wednesday for just the second time in the last decade. The central bank plans to raise rates three times next year, three times in 2018 and three times in 2019.
I feel sorry for anyone who has money invested in the stock market. When the bubble pops and the DOW goes to 7,500 there will be plenty of crying. Every crash we have had since 1913 (or 1776) has been because of the Bankers, who get bailed out every time.
Three Presidents have warned us about the FED.
http://www.worldviewweekend.com/news/article/three-presidents-have-warned-us-about-danger-and-corruption-central-bank-federal