Posts Tagged ‘Milton Friedman’

Notes From Underground: Bernanke and Yellen Are in Lockstep With Policy

March 4, 2013

Friday night Chairman Bernanke delivered a speech on long-term interest rates at the Annual Monetary/Macroeconomics Conference sponsored by the San Francisco Federal Reserve. The basis of his remarks was that the Fed would continue to maintain its robust monetary accommodation because any early extraction may result  in the economy slowing and thus the Fed would have to move to extend the period of aggressive Fed action. It is always important to remember that Ben Bernanke is the main ’37er in the realm of preventing an economic relapse to the deflationary impact of deleveraging. When I say that Chairman Bernanke is a ’37, it refers to the pledge the chairman made to Professor Milton Friedman at the esteemed economist’s 90th birthday party. Bernanke said the Fed made a huge mistake by tightening rates and reserve requirements in 1937 while the U.S. Treasury was instituting an austerity budget at the behest of Secretary Andrew Mellon. It has been Bernanke’s belief that the Fed’s actions coupled with a badly flawed fiscal policy sent the U.S. back into a very severe recession.

(more…)

Notes From Underground: Thanks For The Get Well Wishes…Now, Let’s Get Back To Work

March 28, 2012

While I was away, Mr. 37 revealed that he is a 37er so the markets OUGHT to take very seriously Ben Bernanke’s PROMISE to Milton Friedman that the FED will not make the mistakes of 1937 again. In the interview with Diane Sawyer and the speech delivered at The National Association For Business Economics on Monday, the Fed chairman displayed his 37er credentials in full force.

(more…)

Notes From Underground RE-RELEASE: Remember, Ben Bernanke is a ’37er and He Promised Milton Friedman

January 26, 2012

In light of the FED‘s FOMC STATEMENT and convoluted forecasting yesterday, we’re reissuing an oldie from June 2, 2011. We’ll be back Sunday night but for now, the ’37ER is doing his work.

(more…)

Notes From Underground: Sarkozy and Merkel Place Europe On Double Secret Probation

October 10, 2011

It is now official: EUROPE UNDER THE GUIDANCE OF THE TWO DEANS OF PSY-OPS HAVE A PLAN FOR RECAPITALIZING THE BANKS AND BOLSTERING THE EUROPEAN FINANCIAL SYSTEM. The world heaved a sigh of relief that the Sunday meeting in Berlin resulted in a PLAN. The intricacies of what the plan entails are a secret, but for today the markets reacted positively, grasping for any sense of hope. The world’s equity markets reacted as if EURO’s were being air dropped all over the continent. The BUNDS were sold as the reallocation trade sent money exiting the havens in search of risk and the possibility of higher returns … at least for a day.

(more…)

Notes From Underground: Why is “DEPRESSION” Making its Way Back into the Mainstream Lexicon?

October 2, 2011

The news has been more than dismal for the last three months and the equity markets have certainly reflected fears of a renewed global recession. However, as interest rates are being held at historically low levels and growth continues to stall, the idea of a DEPRESSION is making its way onto the opinion pages of financial news.

(more…)

Notes From Underground: Remember, Ben Bernanke is a ’37er and he Promised MIlton Friedman

June 2, 2011

Tomorrow comes the most important data point for the markets as the BLS releases the monthly unemployment report. Yesterday, the market was abused by the ADP employment info, which was much weaker than expected and lead to a selloff in all asset classes. A quick gaze upon the closing CQG quote board lent credence to the line from Apocalypse Now: “I love the smell of deflation in the morning.” Of course, I jest as I substitute DEFLATION for NAPALM but the use of either causes major destruction. The ADP data was able to cause so much angst because it followed very weak housing and manufacturing numbers released during the previous week. The CONSENSUS for Friday’s UNEMPLOYMENT REPORT is for: NONFARM PAYROLLS of 155,000; the jobless rate to hold at 9.0%; and average hourly earnings to show a gain of 0.2%.

(more…)