We Will All Bear Witness

At some point this afternoon the anointment will be made. President Trump will officially crown the next "Master of the Universe." I assert, that any person that is given the right to create money from the flick of his wrist, or a few monosyllables mumbled to a clerk, has achieved the "Crown of Creation." We will all bear witness, great power is about to be passed on, once again.

With the election of the American President comes pomp and ceremony and well-rehearsed dramas that have been sculpted over the decades. There is no such public regalia that will be put on display for the next Fed Chairman. "Best to leave the citizenry alone," seems to be the words found in the Fed's orchestrated playbook. Yet, behind closed doors, there will be bowing and scraping and the titans of Wall Street will, once again, present themselves for an audience.

The gods of the marketplace will be standing at attention. The dot plots, of old, will reek with a history that has passed. What was before, will not be again. The timeline, will, one more time, be broken. We are setting off on a new adventure now and the recognition of this event, and its significance, should be a point of focus, for us all.

Some volatility is unavoidable, and indeed is a necessary part of the process by which markets and the economy adjust to incoming information … I want to emphasize the importance of data over date … The path of [bond] purchases is in no way predetermined; we will monitor economic data and adjust our purchases as appropriate.

- Jerome Powell, June 2013

Today, our economy continues to recover from the effects of the global financial crisis, unevenly and at a frustratingly slow pace. The task for monetary policy will be to provide continued support as long as necessary, and to return policy to a normal stance over time without sparking inflation or financial instability. This will require a careful balancing, as there are risks from removing monetary accommodation too soon as well as too late.

- Jerome Powell, March 2014

I believe there should be a high bar for 'leaning against the credit cycle' in the absence of credible threats to the core or the re-emergence of run-prone funding structures. In my view, the Fed and other prudential and market regulators should resist interfering with the role of markets in allocating capital to issuers and risk to investors unless the case for doing so is strong and the available tools can achieve the objective in a targeted manner and with a high degree of confidence.

- Jerome Powell, February 2015

I am often asked why rates remain so low now that we are near full employment. A big part of the answer is that, at least for the time being, the appropriate level of rates is simply lower than it was before the crisis. As a result, policy is not as stimulative as it might appear to be…I expect our economy to continue to make progress. Monetary policy will need to remain supportive of growth, as we work through the challenging global environment.

- Jerome Powell, June 2016

A period of low rates for a long time could present significant challenges for monetary policy. It could also put pressure on the business models of some financial institutions. Ultimately, the only way to get sustainably higher interest rates is to improve the broader environment for growth, by adopting policies designed to increase productivity and potential output over the long term-policies that are mainly outside the scope of our work at the Federal Reserve.
- Jerome Powell, January 2017

It's hard for me to see the balance sheet getting lower than $2.5 trillion, let's say, $2.5 to $3 trillion," he told CNBC in June. "That assumes we normalize the balance sheet over the course of the next five years and go back to a fairly small number of reserves.
- Jerome Powell, October 2017

So we have some hints, some indications, some basis for our educated guessing game. Yet, I would emphasize that that is all we can really do at this point: guess. Gaining power does funny things to any man. You are released from some bonds and bear the burdens of others. There are countless examples, in history, of great expectations that were not met. There are also countless, though fewer, examples of people that exceeded expectations. We can only hope for the best.

With the Hopes that our World is built on, they were utterly out of touch,

They denied that the Moon was Stilton; they denied she was even Dutch;

They denied that Wishes were Horses; they denied that a Pig had Wings;

So we worshipped the Gods of the Market, who promised these beautiful things.

- The Gods of the Copybook Headings, Rudyard Kipling

Comments

[EK1949]

"My fear is that no-one really knows how this ends."

How do you know there is something to fear if no one can tell you what it is?

[EK1949]

Why do people think markets end? It's the darnedest thing and I can't figure out where it comes from. There's nothing in all the ups and downs that predicts a final something, or even a good explanation of what that thing might be.

"At some point it ends badly... and the lessons that each generation must learn first hand, having disdained reading about or hearing from their elders of the past excesses, will shape their lives going forward."

Each generation is as bad at learning as the previous one. We build and grow too little, not too much. No wonder each generation must unlearn the dumb things the previous generation taught. The end is nigh, don't build the future, it wastes dollars we'll need for the coffin we'll bury the economy in.

[Maverick 2021]

Should Tax Reform pass congress and become law, the new Fed Chair would be the most important person on the planet.

More US Debt would be created to finance another bailout for US Billionaires.

US Government Tax revenues would be "cut again" and drive the US deficit toward $40 Trillion Dollars by 2027 or sooner.

Putin's Puppet has created more chaos for the rest of us to have to deal with in the near future, as Medicare and Social Security funding are in jeopardy ....

[investrfox]

My fear is that no-one really knows how this ends. Thank you as always, for your intelligent insight.

[TimNeuman]

At some point it ends badly... and the lessons that each generation must learn first hand, having disdained reading about or hearing from their elders of the past excesses, will shape their lives going forward.

But of course that will not be 'the end' but rather a new beginning, and the world will continue, the markets recover, and new 'geniuses' who bought at the bottom will once again repeat the cycle.

[Badsneakers7]

"Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four —
And the Gods of the Copybook Headings limped up to explain it once more".

Rudyard Kipling

[reron]

Mark, like a leading member of the congregation, pickup the script and preach. let's hear what you would do with the crown in hand. Who knows, you might have influence and it would nice to have a non-technocrat enlighten the pointy headed.