DANGERS OF JANET YELLEN AS NEXT FED CHAIRMAN
WRITTEN BY CHRISS W. STREET
Thomas M. Hoenig, the Vice Chairman of the Federal Deposit Insurance Corp, wrote aneditorial today in the Washington Postcomplaining it is unfair that the huge too-big-to-fail banks have less scrutiny by investors because they receive government deposit insurance guarantees, borrow from the Federal Reserve at virtually no cost and have gained public confidence that when they get in financial trouble the taxpayers will bail them out through programs such as the 2008Troubled Assets Relief Program. It may seem strange that someone so powerful in the U.S. financial regulatory system would complain about the obvious flaws in the American banking scheme. But I believe the editorial is a warning that if Janet Yellen is chosen to replace Federal Reserve Chairman, Ben Bernanke, her strategy of igniting inflation to reduce unemployment will cause another banking crisis. Continue reading
