Bye-Bye, Balanced Budgets

The future seems to be coming faster than we thought.

And it is largely thanks to “My Girl,” as former chief White House strategist Steve Bannon called Janet Louise Yellen.

Ms. Yellen left her post as Fed chief earlier this month, sent on her way with wide smiles and enthusiastic felicitations.

Fed Comedy Team

Yes, it is Valentine’s Day. Love is in the air. And here at the Diary, we love the comedy team at the Fed that has given us so many hours of entertainment.

Last week, we set out a series of future headlines – guessing what might be coming.

Recall where they led: a monumental blow up of the U.S. economy and its financial system.

This week, the Trump administration, Republicans, and Democrats seem to be doing their best to make our mock headlines come true.

Our general theory is that Congress and the White House will pick up where the Fed Team left off.

Like a tag team wraslin’ duo, the Fed has pummeled the economy badly. Now, the Blond Bombshell enters the ring… intent on delivering a body slam.

“On the Lookout”

Since 2009, the Fed has added about $3.6 trillion in QE “honey” to the nation’s finances (by buying government bonds with newly created cash).

And it slashed interest rates until it hit the “zero bound.”

That is what boosted stock and bond prices – and debt – to the highest levels ever seen.

And from the incoming Fed chief, Jerome Powell, came the kind of reassurance you’d expect.

“Powell says Fed alert to developing risks,” reported Bloomberg.

Later in the day, it added:

Federal Reserve Chairman Jerome Powell suggested that the U.S. central bank would push ahead with gradual interest-rate increases… even as it remains on the lookout for threats to the financial system in the wake of the recent stock market rout.

We almost doubled over in laughter. Powell really is out of it. Just like Yellen. And Bernanke. The clear and present danger to the financial system is him.