Fed Official Confesses Federal Reserve Rigged the Stock Market — Crash Certain

Posted by on January 8, 2016 in Economy with 8 Comments
image_pdfimage_print

By David Haggith | The Great Recession Blog

richard_fisher

In a dynamite interview, Richard Fisher, former president and CEO of the Federal Reserve Bank of Dallas, gave what may be the biggest confession you’ll ever see and hear from a Federal Reserve insider: the Federal Reserve knowingly “front ran” the US stock market recovery (i.e., manipulated the market) and created a huge asset bubble. Fisher expressed certainty that the “juiced” stock market will come down and is coming down now that the Fed has taken its foot off the accelerator … and that it has a long way yet to go.

While that is no news to readers here whose eyes are wide open, a “market put” has been denied by the Fed and by many market advisors. That the market was an overinflated bubble created by the Fed has been denied, too; but Fisher clearly and gleefully admits the Fed created a bubble that will have to deflate now that the Federal Reserve’s stimulus is off.

As one of the members of the Federal Reserve’s FOMC (the Federal Open Market Committee, which sets US monetary policy), Richard Fisher participated in and voted on all of the Fed’s policies of zero interest and quantitative easing, so he has inside knowledge of all the discussions behind the scenes at the Fed.

Here are the significant quotes from Richard Fisher on CNBC’s video:

What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.

It’s sort of what I call the “reverse Whimpy factor” — give me two hamburgers today for one tomorrow.

I’m not surprised that almost every index you can look at … was down significantly. [Referring to the results in the stock market after the Fed raised rates in December.]

Basically, we had a tremendous rally, and I think there’s a great digestive period that is likely to take place now, and it may continue.

We front-loaded at the Federal Reserve an enormous rally in order to accomplish a wealth effect.


I wouldn’t blame [what is happening in the market’s now] on China. We’re always looking for excuses.

I wasn’t surprised at last year. And I wouldn’t be surprised at a rather fallow performance this year as well.

A lot of people are building cash positions…. Those [investors] that are taking a longer term view are being extremely cautious here, are raising their cash levels, are nervous about the valuations that are in the market.

The values are very richly priced here, so I could see significant downside.

Asked if saw a big unwind from the Fed’s 6.5-year policy and what it would look like on the way down, Fisher responded,

I was warning my colleagues, “Don’t go wobbly if we have a 10-20% correction at some point…. Everybody you talk to … has been warning that these markets are heavily priced.

Elsewhere Fisher said:

The Federal Reserve is a giant weapon that has no ammunition left.

You have to be careful here and frank about what drove the markets…. It was, the Fed, the Fed, the Fed, the European Central Bank, the Japanese Central bank … all quantitatively driven by central bank activity. That’s not the way markets should be working…. They were juiced up by central banks, including the Federal Reserve…. So, I think you have to acknowledge reality.

It’s about time for breaking the economic denial. Acknowledging reality is what many in the mainstream media, at the Fed, and among economists and stock analysts refused to do.

Now that the US stock market appears to be crashing, is Richard Fisher’s confession to cover his own hind end, by saying, “I warned the guys about this, and I voted against QE3 because I knew it went too far?” Is he just the first rat to flee the sinking ship, or is he just the most honest of Fed officials who is no longer on the board so feels freer to talk?

Your thoughts? (And please pass the confession along so that it gets lots of play time because you don’t get a confession like this about the inner arguments of the Fed very often. I imagine Yellen is doin’ a little yellin’ right now.)

You can read more from David Haggith at his site The Great Recession Blog.

Tags: , , ,

Subscribe

If you enjoyed this article, subscribe now to receive more just like it.

Subscribe via RSS Feed Connect on YouTube

8 Reader Comments

Trackback URL Comments RSS Feed

  1. 881146101999320@facebook.com' Wendy Robinson Weseen says:

    Scary

  2. 1028741077146562@facebook.com' Paul Scholes says:

    Hold on to yer hats…

  3. 10153206595001971@facebook.com' Mario R. Núñez says:

    2016….

  4. 10206900367339368@facebook.com' Martijn Derksen says:

    Finally humanity is being unchained…

  5. 1657104844540403@facebook.com' Thomas Johnson says:

    The bank bailouts and quantitative easing have all been attempts at patching a sinking ship. The real problem is our currency and value systems. Our current currency/economic systems assume people are rational with their wealth/debt and require infinite growth in a finite world.

    Not to be a doomsayer but it is a mathematical certainty that the US dollar will collapse in its current form and that will result in the crash of other fiat currencies as well as most other digital/paper forms of wealth.

    The whole thing is like a shaky house of cards. One stressor type event and the whole thing could fall.

  6. 10204835589202540@facebook.com' Kelly Grayson says:

    God Help us. Here we go again

  7. 1648997482034147@facebook.com' Chained Lion says:

    Whoa

  8. 10154527749829768@facebook.com' James Rossiter says:

    It’s a scam, money is not real its pieces of pretty coloured paper or shiny pieces of metal. Most of it is just numbers on a computer made up by the banks out of thin air to enslave you. Let the house of cards fall and lets start again with a system that is for everyone and the planet: https://youtu.be/KphWsnhZ4Ag

New Title

NOTE: Email is optional. Do NOT enter it if you do NOT want it displayed.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

FAIR USE NOTICE. Many of the articles on this site contain copyrighted material whose use has not been specifically authorized by the copyright owner. We are making this material available in an effort to advance the understanding of environmental issues, human rights, economic and political democracy, and issues of social justice. We believe this constitutes a 'fair use' of the copyrighted material as provided for in Section 107 of the US Copyright Law which contains a list of the various purposes for which the reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research. If you wish to use such copyrighted material for purposes of your own that go beyond 'fair use'...you must obtain permission from the copyright owner. And, if you are a copyright owner who wishes to have your content removed, let us know via the "Contact Us" link at the top of the site, and we will promptly remove it.

The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. Conscious Life News assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms.

Paid advertising on Conscious Life News may not represent the views and opinions of this website and its contributors. No endorsement of products and services advertised is either expressed or implied.
Top
Send this to a friend