Audit the Fed?!?

The ongoing debate about monetary regime change. It is hidden under the cloak of audit the fed bills in Congress.

WSJ Grand Central: The Fed sees GAO reviews of its monetary policy decisions as a congressional intrusion into its independent decision-making. Former Fed Chairman Ben Bernanke strongly and successfully resisted “Audit the Fed” proposals and Chairwoman Janet Yellen is sure to do the same. In a December news conference,  Ms. Yellen said she would be “very concerned” about such a bill and would “forcefully make the case” against it.
The Fed demonstrated its savvy in dealing with Congress during Dodd-Frank debates in 2010. Efforts to impose congressional inspections of monetary policy and to reduce the Fed’s bank regulatory powers failed. It emerged from those debates in most respects with more power than it had before.
Ms. Yellen will have President Obama on her side again if the bill gets new life. She will also have the central bank’s 12 regional bank presidents, an influential but little seen force in Congress with strong connections in the deep-pocketed business and banking communities around the country.

Now, of course banker bot is always optimum Black-Scholes Weiner motion and so there is nothing invisible, and no observable hedge.  But Ben Bernanke, alias Edward Knight, clearly bailed out the pension funds with QE, and that was mainly to give the California Flounder some breathing room.  Janet, today, is using her portfolio to help Treasury pay its interest costs, and that is increasingly deflationary in the short term.

So, on the one hand we have the no arbitrage monetary theory, and on the other hand we have bozo central banker and monetary regimes with a 40 year cycle time. The entire discussion is ridiculous, central bankers know damn well it is regime change, the 40 years is up.  WTF do they think they are avoiding?  Janet transparently is violating her own inflation target, and we all know it. The research groups at the Fed are perfectly aware of the Weiner process, they know the theory of everything is here, and they almost certainly inform Janet.  Ditto for Jack Lew, he is simply aware of the new Weiner formulation, and he knows exactly why he and Janet cannot get the interest costs stable.

Who are they kidding? Are we all supposed to deny the absolutely mandate that spectral theory imposes on finite, connected networks. They can fool members of Congress and the voting public, but the moment has arrived, as it has always arrived every 40 years. Most economists know this, if they act in denial then they are frauds.