This is something we have long covered here. Several news articles are referencing a recent article in the Financial Times that offers quotes from two Federal Reserve officials. Below is a one of the quotes from this Reuters article. Further below is an added comment. It should be noted that the original article in the Financial Times quotes other Fed officials as being less concerned.
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Minnesota Federal Reserve President Neel Kashkari:
"I don't know what the best policy solution is, but I know we can't just keep doing what we've been doing," he told the newspaper.
"As soon as there's a risk that hits, everybody flees and the Federal Reserve has to step in and bail out that market, and that's crazy. And we need to take a hard look at that," he said."
Please click here for the full Reuters article
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My added comments: I had not planned to post but one more article before the upcoming US elections since those are dominating all news right now. But these quotes in this article seem potentially significant so I wanted to make sure I alerted readers to them. It is interesting to see quotes like this coming from some Fed officials just a couple of weeks ahead of the elections.
Since this is a news note, I'll try to pass on other bits of news I see out there in bullet point form below:
- Both sides in the upcoming US election seem sure they will win. At this time my earlier election analysis article still seems appropriate with any of the five scenarios listed still possible as best I can tell. I have seen a number of pieces of information across the political spectrum indicating the election is much closer than most polls have been indicating, so scenario #5 is still not out of the question.
-There is significant concern across a broad variety of analysts that the potential for civil unrest after the upcoming election exists. All this could impact markets at any time although so far the markets have been calm. Since the grass roots on both sides feel sure they will win, one side is going to be very disappointed which may add to an already divisive atmosphere.
-Fed Chairman Powell to Speak About Digital Currencies at the IMF - see this CoinDesk article. Fed nominee Judy Shelton puts out this note about this on her Twitter feed.
-Atlanta Fed Now is still projecting GDP to be over 30% for the 3rd quarter. In a recent TV interview, Trump Administration spokesman Larry Kudlow said he would project 4th quarter GDP will push 10% for that quarter.
There are all kinds of cross currents out there even as the US election results will surely dominate the news for the next few weeks. I plan to post one more article before the election titled - 'Three Important Things I Have Learned Doing This Blog'. This blog started in January 2014 in an effort to try and monitor news across a wide variety of news and opinion formats and watch for any signs of major monetary system change. The reason this is important is that all of us have to make personal financial decisions and it is critical to understand what rules we are playing under to make those decisions. It is important to be aware of any potential major changes to the rules so as not to be taken by surprise.
So far, we have not seen that kind of major change. But recent events are certainly more conducive to the potential for change even as I have learned that it is very hard to make major changes to an existing system for a number of reasons. It seems as though it may take an event like Neel Kashkari talks about above ("a risk hits and everybody flees") to create an atmosphere where change is forced to take place. It is unlikely that anyone will enjoy forced change under these conditions which is why I suspect the desire to preserve the present system is still so pervasive. Also, there is no political consensus on what changes to make.
I talk about all that in the next upcoming article.
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