We Now Know Janet Yellen Is Not Very Bright

TND Guest Contributor:  Dave Kranzler | 

But did she “stretch the truth” under oath in her Humphrey Hawkins testimony and is she guilty of breaching the “independence” of the Fed?

“Many weeks we get together and confer about matters of mutual concern, but we are completely independent from the executive branch in the conduct of monetary policy.”

This article recounts House Financial Services Chairman Jeb Hensarling grilling Yellen with a degree of accountability that I can’t recall ever seeing – not even from Ron Paul.  He held her feet to the fire and may have caught her in a lie.

This issue at hand is Yellen’s apparent frequent meetings with Treasury Secretary Jack Lew and the degree to which these meetings require accountability to the public, or at least Congress.  This article is a must-read on this:  The Fed In Danger

It seems that Yellen and Lew meet weekly.  What can they possibly be discussing?   If they are discussing monetary policy in private, this is a significant breach of the Fed’s alleged independence.  At the very least the nature of the meetings should be a matter of public record.

Just what exactly are “matters of mutual concern?”  Any matters of concern that concern the Fed and the Treasury are matters that should concern the public, for whom Yellen and Lew work.

Unfortunately over last several administrations, elected officials and the representatives they appoint – both of whom are employed by the public, have forgotten that they are public servants.  In this regard, and theoretically according to the law, we are entitled to know about these frequent meetings on matters of mutual concern between Yellen and Lew.

At the very least, assuming they are discussing more than just their weekend leisure activity plans, there is a  potential for grave conflict of interest when the world’s largest issuer of debt is meeting secretly with the world’s largest buyer of debt.

I hope someone with the ability to enforce the law presses Yellen a lot further on this…

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About Dave Kranzler

 I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics.  Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.

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