IN CONFIDENTIAL MEMO, TREASURY SECRETARY JANET YELLEN CELEBRATED UNEMPLOYMENT AS A “WORKER-DISCIPLINE DEVICE”

Yellen wanted this to be the best of all possible worlds, but the best world she could conceive of was terrible.

In June 1996, Janet Yellen — then a member of the Federal Reserve Board of Governors, later chair of the Fed herself, and currently secretary of the Treasury — wrote an extraordinary memo to then-Fed Chair Alan Greenspan. Anyone who wants to understand how the world works should read it, and thank Tim Barker, a historian who obtained it via the Freedom of Information Act.

What makes the memo so telling is threefold.

First, while expressed in abstruse technical language, it shares a perspective with the most radical left-wing critiques of capitalism. Yellen goes 90 percent of the way to proclaiming, “The history of all hitherto existing society is the history of class struggles.”

Second, Yellen is not, of course, calling for a proletarian revolution. Rather, as Noam Chomsky has pointed out, “vulgar Marxist rhetoric is not untypical of internal documents in the government,” just “with values reversed.” In Yellen’s case, she is making the case for, as she writes, the positive “impact of heightened job insecurity.” A rise in worker insecurity in the mid-1990s meant everyone was too scared to ask for raises, which meant businesses wouldn’t need to hike prices, which meant even with the falling unemployment at the time, the Fed didn’t need to raise interest rates to slow the economy and throw people out of work.

Third, Yellen is not a monster. Indeed, from the perspective of regular Americans, she’s about as good as it gets at the summit of power. The problem, for those of us down here on the ground, is her overall worldview. She might personally want things to be nicer but is certain the science of economics places incredibly sharp limits on the possible, and all we can do is try to make small improvements within those limits.

The memo is titled “Job Insecurity, the Natural Rate of Unemployment, and the Phillips Curve.” Barker learned of it from references in the books “Maestro” by Bob Woodward and “Empathy Economics” by Owen Ullmann. Greenspan distributed the memo to the entire Federal Open Market Committee, or FOMC — the group that decides interest rates — and it worked. As Ullmann puts it, “Yellen rescued Greenspan from his tight spot.”

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FED Chairman Jerome Powell Met with FTX’s SBF in February 2022 When the FED Was Examining a Federal Digital Currency

The FED’s Jerome Powell met with then CEO and founder of FTX, Sam Bankman-Fried (SBF) in February 2022.  This was the same time that the FED was examining the implementation of a federal digital currency. 

FTX’s founder SBF is sleeping in his parents’ basement after being rated one of the youngest billionaires in the world.  The former crypto king is now facing nine counts by the DOJ in the Southern District of New York related to defrauding its customers.

During his incredible rise, SBF was meeting some of the world’s top financial operatives.  In February of 2022, SBF met with FED Chairman Jerome Powell.

It’s unknown what was shared at this meeting but a short time later in June 2022, the FED announced its plans to develop a central bank digital currency.

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Fed Blames Inflation on Americans ‘Splurging’ on Goods — Not the Trillions of Dollars they Printed

A few weeks ago, US Secretary of the Treasury Janet Yellen appeared on the Late Show With Stephen Colbert to discuss a range of issues both political and personal.

The most widely reported moment in the interview came when Yellen talked about practicing her signature (don’t ask me why this is newsworthy, I have no idea). However, a significantly more important moment has not gotten the attention it deserves.

When asked by Colbert to explain the reasons behind the worst inflation the US has experienced in 40 years, the former Federal Reserve chair blamed it primarily on rising consumer spending—Americans “splurging” on goods—at the start of 2021 once the Covid-19 lockdowns were lifted. This, compounded with supply chain issues and the war in Ukraine can sufficiently explain inflation, Yellen claims.

But can it really? Let’s take a closer look.

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“I Don’t Feel The Pain Of Inflation Anymore” Says Wealthy SF Fed Chair From Ivory Tower

San Francisco Fed President Mary Daly, who makes $422,900 per year – and scrambled out of dozens of investments last year shortly before the Fed finalized strict new limits on policymakers’ portfolios – just had her ‘Nancy Pelosi Ice Cream” moment, dropping a sidewalk-spattering turd from her ivory tower on the average struggling American.

During an interview with Reuters broadcast live on Twitter spaces, Daly said: “I don’t feel the pain of inflation anymore. I see prices rising but I have enough… I sometimes balk at the price of things, but I don’t find myself in a space where I have to make tradeoffs because I have enough, and many Americans have enough.”

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The Fed Is Quietly Handing Out $250 Million To A Handful Of Happy Recipients Every Single Day

The Fed’s QE may be over, and QT may be just starting (it won’t last long), but don’t think the Fed free money giveaway is ending any time soon. In fact, for a handful of happy, mostly anonymous counterparties, the real free-money bonanza has just begun!

Case in point: the Fed’s reverse repo facility. While one can debate for hours why there is a record $2.330 trillion in cash parked at the Fed’s overnight facility and what it means for systemic plumbing problems, the fact is that there is a record $2.33 trillion in cash parked at the Fed’s overnight facility, doing nothing.

Well not nothing: it was nothing when rates were zero, but at 1.55% which is the current reverse repo rate, that $2.33 trillion is a golden goose for the 108 counterparties that are parking cash at the facility, a mixture of money market funds, banks, GSEs and various other financial intermediaries.

How big is this particular Golden Goose? The chart below shows the payment in interest that the Fed makes day on this record $2.33 trillion in funds: as of today it amounts to just over $100 million every single day! That’s right, more than $100 million in interest payments on funds parked with the Fed, which is by definition the world’s only risk-free counterparty!

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