The Yellen Prophesies

Twenty Years After the Iraq Invasion, Dubya and Blair are living it up! [The Rude Awakening] March 22, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Yellen Prophesies - Janet Yellen is a dedicated Keynesian. - Keynesian economists believe private sector economic decisions lead to “inefficient” macroeconomic outcomes. - There’s no “mixed economy” or “third way,” but Keynesians haven’t figured that out yet. [Has World War III Just Begun?]( NATO sends tanks to Ukraine… Russia prepares for a winter offensive… [Is the beginning of World War III?]( Jim Rickards recorded an urgent message with his thoughts below. [Click here to learn more]( But more importantly, he’s offering to send you an [exact playbook]( on what he sees playing out in the world and what you need to do to prepare. [Simply click here now to watch my short message and to see how to claim a copy completely free of charge.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Good morning from gorgeous Asti! While there’s still so much to write about the current market goings-on and the government machinations to contain it, Byron King once again wrote something too good to wait. Byron has written an excellent piece on Janet Yellen’s adherence to a dogma that has long been discredited. Thanks to that near-religious conviction, she’s been at or near the top of every financial disaster of this millennium. It’s long past time she should’ve retired. Read this piece from a Harvard grad who was there to see Yellen’s career in its embryonic stages. Not many people can lay claim to that. Byron can. See you tomorrow. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening [Warning: Will “Bidenflation” Destroy Your Retirement?]( [Click here to learn more]( If you’re like most Americans, you’ve worked hard for decades to build your financial legacy. And now, as a result of Biden’s disastrous money printing policies, that’s all at risk. According to one top retirement expert, “Bidenflation” threatens to destroy your retirement and make your hard-earned savings worthless. That’s why you must take action right away to protect yourself… [Click here now to get the simple, step-by-step actions to survive “Bidenflation.”]( [Click Here To Learn More]( The Yellen Prophesies: Big Spending, Big Government, and Hitting the Economic Iceberg [Jim Rickards] BYRON KING “Old soldiers never die,” said Gen. Douglas MacArthur in his long-ago farewell address of April 1951. “They just fade away," he added with a note of deep sadness. I sure wish we could say that about Keynesian economists. That is, about economists who follow the doctrines and dogmas of John Maynard Keynes (1883 – 1946), a British economist whose main works were published in the 1920s and 30s and whose influence still steers the field of economics in the current world. Because not only do old Keynesians never seem to die, but neither do they even fade away. Indeed, on occasion, old Keynesians become Secretary of the Treasury, which is the case with Janet Yellen. Here’s why I bring it up… Ancient Texts Reveal the Future A while back I was organizing boxes in my basement. Inside one carton I found a collection of old Harvard student course catalogs from 1972 through 1978, the years when I studied geology there. [SJN] Inside these pages are the Yellen prophesies! BWK photo. Coincidentally, those mid-1970s years also cover a time when a much younger Janet Yellen was on the economics faculty at Harvard. [sjn] Janet Yellen, long ago, on faculty at Harvard. In 1971 Yellen earned a Ph.D. in economics from Yale University. Her thesis was entitled Employment, output and capital accumulation in an open economy: a disequilibrium approach, prepared under the supervision of Nobel laureates James Tobin and Joseph Stiglitz. Then with new her newly-issued New Haven degree in hand, Yellen migrated north to Cambridge and went on the payroll as an assistant professor of economics at Harvard, 1971–76. It’s fair to say that Yellen rubbed elbows with quite a distinguished group of Harvard colleagues, back then. While paging through the old tomes, I saw familiar names of long-ago professors from whom I took an economics course or two – Otto Eckstein, Kenneth Arrow, Robert Dorfman, and Wassily Leontief. And then there was Janet Yellen, Assistant Professor of Economics, with her bright, shining future still to come. In 1972 – 73, Yellen taught a course in “Aggregative Economic Policy.” This covered “Theories of national income determination, employment, interest, investment, money, and economic growth from Keynes to the present.” In 1973 – 74, Yellen taught that course again, with the same name except the course description changed to “Keynesian and post-Keynesian theories of national income determination, introduction to monetary theory, cyclical fluctuations and economic growth.” A year later, in 1975 after a leave of absence, Yellen taught courses entitled “Macroeconomic Theory” and “Economic Theory.” The first course covered “Keynesian and classical models of employment and income determination; theories of inflation, aggregate fluctuations, and growth; principles of stabilization policy; theories of consumption, investment and portfolio choice.” The second course in 1975 covered “Static Keynesian models and their classical antecedents; modern monetarist and post-Keynesian models; theories of consumption, investment, and portfolio behavior; theories of aggregate fluctuation and inflation; economic models and policy optimization.” Keynes, Keynes, Keynes Yes, it’s all quite a mouthful. And do you notice anything about Yellen’s choice of titles and subject matter? I mean, aside from her extensive use of deep-insider academic jargon that almost no mere mortal can begin to fathom. Exactly: everything is all about Keynes! In essence, back when Yellen was fresh out of Yale she taught party-line, orthodox Keynesian economics. And what was that? Well, Keynesian economists believe that private sector economic decisions often lead to what they perceive as “inefficient” macroeconomic outcomes. That is, an economy typically just does not do what central bankers and government planners want it to do. And this lack of efficiency is a very bad thing in their collective mind. When viewed through a Keynesian economic prism, people don’t behave properly. Their cumulative, micro-economic sins all add up to grave policy faults and macro-inefficiencies. Thus, according to Keynes and his acolytes, something must happen to correct the problems. And what might that be? The standard Keynesian policy solution to economic inefficiency is that government takes active measures via a (supposedly) wise and knowledgeable central bank, one filled with people who hold PhDs in economics from top-notch universities. Because they know stuff. These central bankers act in tandem with fiscal policy emanating from a (supposedly) all-seeing, all-knowing government, one filled with well-intended political actors. And politicians know stuff, too. Well, that’s what they tell you, anyhow. Under Keynesian theory, between those wise bankers and politicians at the helm, the overall economic ship will sail much better. To continue the nautical metaphor, a well-guided economic ship will hit no icebergs. Or that’s the idea. Indeed, the Keynesian goal is “stabilize output,” especially over and around business cycles. In other words, the Keynesian approach is intended to smooth out the economic bumps. Or from a more political angle, it eliminates those pesky recessions that lead to large-scale business failures and unemployment. No Roaring 1920s; no Great Depressions of the 1930s. That’s the lure. Cynics might call this an “economics-lite” version of a 1920s/30s-era Soviet Five-Year Plan, in which the central state controls the money supply and directs investment to virtuous ends that the commissars discern. Because that planned Soviet model was Keynes’s intellectual competition back then; or the economic counter-model. In the 1920s/30s, the world was evolving out of both the Great War (aka World War I), as well as the Bolshevik Revolution. The Anglo-Saxon model – meaning primarily what was happening in Britain and the U.S. – competed for world intellectual acceptance with the Lenin-Stalin model in the Soviet Union, based on Karl Marx and his book, Das Kapital, published in 1867 as a critique of proto-capitalism. So as you may have discerned from this timeline, much of what passes for modern economics – certainly Keynesianism – is rooted in century-old thinking that formed as a counterpart to even older, Marxian ideas from 150 years ago. That is, Keynesianism involved government control but through the more benign approach of a so-called “mixed economy.” The private sector must jump through myriad policy hoops created by government and its legions of Very Smart People, the ones with those PhDs in economics. And again, the desired end-state in all of this is to avoid recessions. I won’t belabor the preceding points; people write long books about Keynesianism, versus, say, Soviet central planning, let alone the far more free-market-focused “Austrian” school of economics. Of course, smart people also argue over the merits of recessions. Because one way or another, recessions happen. Economies undergo periodic, and sometimes major contractions that tend to clean out the accumulated muck of malinvestment and poor spending decisions. And of course, people argue over whether or not it’s truly possible to control business cycles. There’s all of this, and much more to discuss about Keynesianism; and really, at the end of the day how much government control do people really want in life, right? But for now, let’s return to Harvard and Janet Yellen. Because by 1976, and despite her Stakhanovite focus on instructing Keynes to eager, impressionable students, young Yellen was denied tenure by the cognizant faculty committee. She received her walking papers. Ms. Yellen packed her bags and went on to another series of jobs over subsequent years, back and forth between government and academia. In the late 1970s and 80s, Yellen’s employment ranged from staff work at the Federal Reserve, to an appointment as a professor at Berkeley; not shabby at all. In the 1990s she found a gig with the Clinton administration, and some years later, under President Obama, rose to become Vice-Chair of the Fed, 2010 – 14, and Fed Chairwoman, 2014 – 18. Note that those years – the 2010s – with Yellen near or at the top of the Fed were also a time of long-term, historically-low interest rates, and in fact negative real rates when inflation is counted. [SJN] It’s not inaccurate to say that the low interest rates of the 2010s were a backdoor central bank subsidy to the broader bank sector. The macro-idea was for the Fed to help recapitalize the banking sector in the wake of the 2008-09 global financial crash. But at the same time, this low-interest subsidy came out of the collective hide of savers and investors who muddled along with next to no return on their socked-away cash. Some commentators have calculated a $4 trillion cost to all of this, taken from savers and handed to bankers. And if you dust for fingerprints during that decade-long spree of government subsidy, you will absolutely find those of Janet Yellen. Her Keynesian upbringing was on display throughout that episode. Yellen’s central bank approach dramatically reshaped the economy in a low-interest environment, and a certain class of people made one heck of a lot of money. With this in mind, it appears that across her career Ms. Yellen’s inner Keynesian instinct has always been at the forefront. She literally talked her book in the 1970s at Harvard, and even today still deeply believes the Keynesian dogma that central bank monetary tinkering can successfully manage a vast economy. To keep with nautical analogies, Yellen believes that Keynesian economics will steer the proverbial ship through the field of economic icebergs. Another angle of the Yellen-Keynes approach is that if the economy doesn’t respond as intended, then there just wasn’t enough government oversight and central bank tinkering. Recently, we saw more of that Yellen Keynesianism on display when she simply and summarily overrode the law and rules that govern federal deposit insurance on bank accounts, in the matter of Silicon Valley Bank (SVB). No doubt, you’ve followed the tale. The Federal Deposit Insurance Corporation (FDIC) will backstop a maximum of $250,000 per account holder at any given bank. But at the ill-fated SVB, about 97% of total holdings exceeded that number, a factor of about 33 to 1. Another way to say it is that the depositor base included a large number of cash-rich, if not well-off people and businesses. Unilaterally, Yellen and her associates within the Biden Treasury Department rewrote the FDIC rules to “insure” every dollar claimed against every deposit in SVB. Yellen removed the limits, and no depositor lost a dime. And then Yellen rigged the FDIC fund to tap a new assessment onto other banks out across the country, where the solvent ones – and their customers, like you perhaps – would pick up the slack for the insolvent SVB. When asked about it, Yellen replied that the idea was to save “systemically important” banks. Oh, now she tells us. Except that SVB was not previously considered critical, not before a bunch of well-connected people stood to lose some serious money. But hey, with Yellen at the helm, the ship made a quick course change, and the depositors got their money back, with no issues. Even more recently, Yellen testified to the U.S. Senate that she would make those “systemically important” calls when, where, and how she determined. Anymore, it’s all up to her and her government staff. So now, under the ministration of Janet Yellen, the entire banking system has reached a point of profound contradictions. Among those is an FDIC with rules on the books about insurance limits, but the rules don’t apply when Yellen thinks differently. Another way to say it is that we now live in an era of intellectual chaos within the field of economics writ large, and banking more specifically. “Buy rumors, sell news,” goes the old saying. And the news is that America’s economic system has just hit one of the biggest icebergs in the sea, with Janet Yellen at the helm. Sad to say, her Keynesianism never faded away before we reached this awful point. Oh, and if you want a more direct takeaway, buy gold. That’s all for now. Thank you for subscribing and reading. All the best, [Byron W. King] Byron W. King In Case You Missed It… Patriotism Doesn’t Pay, But Loyalty to The State Does [Sean Ring] SEAN RING Happy Tuesday! I was going to write about the Credit Suisse debacle today. Believe me; there’s plenty more to be said about that particular vintage of banker idiocy. And we’re nowhere near done with our banking troubles. Rumor has it that the FDIC is indeed exploring ways to insure all deposits in the United States. Like all things socialistic, it sounds good at first but will deliver a solution opposite to the one intended. I’ll save it for another day. Because it’s been twenty years since the USG drained its Treasury and started printing money out of thin air to finance an unwinnable war. The Iraq War II was predicated on a lie, started by an idiot, and prosecuted by lunatics. What made it worse was that the US didn’t want to go it alone. The US wanted to form another “coalition of the willing” like the first time. But none of our allies thought Dubya had a brain in his head. Not even the Brits, but that didn’t stop them. London’s only foreign policy then, as now, is to do everything America does with more enthusiasm and better pronunciation. It’s only one of the reasons the UK is in the diplomatic hole it’s in right now. The Europeans are still pissed off about Brexit, their former colonies can’t stand them, and the US finds the UK rather useless at the moment. But let’s journey back to when I still had brown hair and the US had the moral high ground: 2003. If My President Says It One of the things that drives me nuts is when I look back on my naiveté. In 2003, I was 28 years old, living in London, and working for one of the world’s bulge bracket banks (alas, no more). And I still said stupid shit like, “If my President says we need to invade, then we need to invade.” And it was Dubya, for crying out loud… Oh, the shame of it all! What’s more, Londoners had organized a Million Man March in London against the war. But UK Prime Minister Tony Blair was all for the war. Blair made up some nonsense about Saddam having weapons that could reach the UK in only forty-five minutes. Blair wasn’t just enthusiastic about the war but positively foaming at the mouth. Get Up the White House’s “Arse” At the time, I didn’t understand right away. I always considered the Brits the elder statesmen, the cooler heads who’d prevail over any American hotheads. But since the UK was far weaker than in the past - yup, they love their welfare state over there - London’s only option was to back America on every move. “We want you to get up the arse of the White House and stay there,” is the instruction UK Ambassador to the US Christopher [Meyer alleges he received]( from Blair's chief of staff, Jonathan Powell. Men like MP George Galloway were ridiculed at the time. French President Jacques Chirac and German Chancellor Gerhard Schroeder were ignored. These men were patriots. They were loyal to their countries. The term “cheese-eating surrender monkeys” was applied to the French. Freedom fries - for God’s sake - made the rounds. I remember American friends telling me they wouldn’t drink Grey Goose vodka, made in France… as if it tasted good in the first place! But not in the UK. Once the march was over, everyone quietly resigned themselves to the war and didn’t spit on any soldiers. But once the fighting was over, the UK conducted the Chilcot Inquiry. The Iraq Inquiry (also called the Chilcot Inquiry after its chairman, Sir John Chilcot) was a British public inquiry into the nation's role in the Iraq War. Prime Minister Gordon Brown announced the investigation in 2009, and in 2016 it was published. From [Wikipedia]( The report – described by BBC News as "damning,” by The Guardian as a "crushing verdict,” and by The Telegraph as "scathing" – was broadly critical of the actions of the British government and military in making the case for the war, in tactics and in planning for the aftermath of the Iraq War. Richard Norton-Taylor of The Guardian wrote that the report "could hardly be more damning" of Tony Blair and "was an unprecedented, devastating indictment of how a prime minister was allowed to make decisions by discarding all pretense at cabinet government, subverting the intelligence agencies, and making exaggerated claims about threats to Britain's national security.” The whole war was a sham and a costly one at that. [Urgent: Currency Wars Alert]( “Worst case scenario is almost inevitable” -Former Pentagon Insider Jim Rickards In my 2011 book, I warned that the U.S. was engaged in a currency war. And that these wars: “Degenerate into sequential bouts of inflation, recession, retaliation and actual violence as the scramble for resources leads to invasion and war. ” Now with Putin invading Ukraine…Rising tensions with China… Inflation, recession, and supply chain issues all hitting the U.S. economy at the same time. It seems as if some of my worst fears have finally come true. [That’s why I’ve recorded an urgent video message.]( To update you on exactly what you need to be doing to protect yourself. Because if history is any indicator, this will not end well. [Click here to view my urgent video message.]( [Click Here To Learn More]( So How Much Did the War Cost? Luckily, we have independent analysts keeping track of this stuff. Here’s what @CostsOfWar have found so far: [SJN] Credit: [@CostsOfWar]( Remember this exchange (via [@BillHighland57]( March 2003 interview RUMSFELD: The Office of Management and Budget estimated it [the cost of war] would be something under $50 billion. STEPHANOPOULOS: Outside estimates say up to $300 billion. RUMSFELD: Baloney. $50 billion… Well, Donnie Unknowns, the DoD operations themselves cost nearly $900 billion! The interest alone on the war spending was nearly 5x your $50 billion. Never trust politicians with numbers. They’re purposely innumerate. The UK spent much less but also has a much smaller economy: [sjn] Credit: [The Independent]( And the highest cost of all: [SJN] [SJN] Credit: [The Independent]( We’re not in Maddie “It was worth killing 500,000 kids” Albright territory, but it’s still pretty bad. And all on a war that was supposed to be about WMDs, but was really about oil. Wrap Up I’m pretty sure Dubya and Blair aren’t “patriots.” But, Dubya paints, while his family’s fortune is between $400 and $ 500 million. And Tony Blair, well, he keeps moving his lips to the tune of $73 million. Oh, I forgot one critical statistic… The number of weapons of mass destruction (WMDs) found was zero. Let’s not forget Colin Powell’s eternal damnation for lying. Maybe one day, Julian Assange will escape and tell us more. Let’s hope for that. In the meantime, know that crime does pay, especially in the service of The State. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. 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