Extreme Market Volatility Caused by Janet Yellen: Her Self-Serving Parting Gift to Powell – by Michael Carino

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Over Janet Yellen’s tenure at the Federal Reserve since 1994, she has been responsible for short term Federal Reserve policies of assisting poor partisan political economic policy with economic growth through extreme financial conditions. These short run focused policies culminated with her exiting the Federal Reserve Chairman post on Friday with the most overvalued financial conditions that ever existed – domestically and globally. This includes the lowest, most unjustified interest rates ever, lofty equity and commercial real estate valuations, opaque financial market drivers where the majority of the volume is executed by a few participants and countless other bitcoin like creations that the public will only learn about when they become systemic failures.

Having been out of the office for just one day, Janet Yellen decided to publicly pop these financial bubbles she created over decades with a speech acknowledging the overvalued financial conditions and dangers. “Price-earning rations are near the high end of their historical ranges” and commercial real estate prices are now “quite high relative to rents” Yellen said in an interview Saturday that aired on CBS’s Sunday Morning. She added “Now, is that a bubble or is it too high? And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.”

Did she really say this one day out of office? And the world is still wondering what triggered the massive volatility and trillions in losses in the markets? Did she just have an out of body experience and forget she has been the Federal Reserve Chairman responsible for these conditions?

Reckless, egotistical, self-serving and revengeful come to mind. Let’s break this down for those that don’t understand the financial landscape and her culpability.

The last three Federal Reserve Chairmen have all masked political dysfunction and resulting damage to the true economy through short term growth assisted by lofty financial conditions. Alan Greenspan juiced the economy with low rates so he could leave the Fed Chair post with what appeared a healthy economy. However, those low interest rates left one of the biggest housing crisis for Fed Chair Ben Bernanke to clean up.