In my opinion Richard Fisher said in plain English what Ben Bernanke is trying to say in a much more politically correct way – hey Congress, get your act together because I have done just about all I can do on a monetary basis, so it is up to y’all to make the tough decisions on fiscal policy that need to be made to get this economy going again.
-Jeffrey Saut, managing director, Raymond James & Associates
“Just recently, in a hearing before the Senate, your senator and my Harvard classmate, Chuck Schumer, told Chairman Bernanke, ‘You are the only game in town.’ I thought the chairman showed admirable restraint in his response. I would have immediately answered, ‘No, senator, you and your colleagues, Democrat and Republican alike, have encumbered our nation with debt, sold our children down the river and sorely failed our nation. Sober up. Get your act together. Illegitimum non carborundum; get on with it. Sacrifice your political ambition for the good of our country – for the good of our children and grandchildren. For unless you do so, all the monetary policy accommodation the Federal Reserve can muster will be for naught.”
... Richard Fisher (President of the Dallas Federal Reserve)
In my opinion Richard Fisher said in plain English what Ben Bernanke is trying to say in a much more politically correct way – hey Congress, get your act together because I have done just about all I can do on a monetary basis, so it is up to y’all to make the tough decisions on fiscal policy that need to be made to get this economy going again. Surprisingly, I think Congress, and the President, will rise to the occasion because if they don’t, and the country falls off the “fiscal cliff” for an extended period of time, it most assuredly will put us back into a recession. To be sure, it is kiss and tell time inside the D.C. Beltway and in my 42 years in this business, when something absolutely had to happen it has typically happened. For example, in October 1974 Franklin National collapsed for the largest bank failure in U.S. history, in May of 1974 New York City was insolvent, September 1979 saw the dollar implode, in January 1980 inflation soared to 18.1% with short-term interest rates spiking to more than 20%, the October 1987 “crash,” in August of 1990 Iraq invaded Kuwait, the summer of 1998’s Russian default and subsequent Long Term Capital Management meltdown, not to forget the Enron/ WorldCom debacle – GM’s bankruptcy – the Flash Crash – the downgrading of U.S. credit rating, well you get the idea. And after each one of those crises the economy, and the stock market, survived and then prospered. I think it will play that way this time as well.