Yale Ph.D, Distinguished Fellow, And Owner Of The Dumbest Words Ever Spoken…

Are you ready to hear the dumbest sentence ever uttered?

You won’t believe the credentials of the person who said it.

On paper, this person has an impressive list of accomplishments:

  • Graduated summa cum laude from Brown University
  • A Ph.D in economics from Yale
  • Received an Honorary Doctorate from the London School of Economics
  • Winner of the Adam Smith Award from the National Association for Business Economics
  • Recipient of a Distinguished Fellowship from the American Economic Association

I could go on…

Then there are all of the fancy job titles. Positions such as:

  • Chairwoman of President’s Council of Economic Advisers
  • President and CEO of the Federal Reserve Bank of San Francisco
  • Chairwoman of the Federal Reserve

Those are three of many important roles this person has had. (You probably know where I’m going with this now.)

I mean realistically, to have a bio like that, what does a person’s IQ have to be?

140?  Maybe higher?

Einstein's IQ

Click to enlarge

We are certainly talking about an IQ that is in the top couple of percent of humans. A person with a lot of intellectual horsepower.

There is no disputing that.

Yet, with all of those brains, accomplishments, and decades of experience, how is it that our Federal Reserve Chairwoman Janet Yellen is still capable of saying something as ridiculous as this:

Another financial crisis not likely ‘in our lifetime[1]

Are you kidding me?

How can someone this smart seriously go on record with something like this?

The very reason that another financial crisis is an absolute certainty is that the people at the top of our financial system continually think like this.

They believe that they are so smart that they can make the system foolproof.

They believe that they are so smart that they can foresee all possible future scenarios.

They believe that they are so smart that they will never make a mistake. It is absurd.

I’m telling you, these Federal Reserve intellectual heavyweights must make absolutely terrible investors because their overconfidence will forever be their undoing.

It is very simple folks, as the saying goes…

“You don’t know what you don’t know.”

That includes me, you, and certainly Janet Yellen.

What We Do Know Sure Looks Like It Could Trigger A Financial Crisis – Eventually

I’m not saying that another financial crisis is imminent.

What I am saying is that to assure people that another won’t happen in a lifetime is crazy talk.

Janet Yellen is 70 years old. How is possible that she has not been humbled enough by mistakes during her life to know how hard it is to predict the future?

I know I have far more often than I care to admit…

For some perspective on how foolish this Yellen quote is, let’s consider what her predecessor, Mr. Bernanke, said this on January 10, 2008:

The Federal Reserve is not currently forecasting a recession[2]

That was mere months before what became the greatest financial crisis of our lifetimes to date.  Bernanke couldn’t predict the next twelve months and Yellen is willing to assure us of safety for decades to come.

Is this hubris or is this delusional?

When I hear someone in the position of Janet Yellen express this kind of overconfidence, it reminds me that it is up to me to protect my wealth.

There are going to be bumps in the road, there always are.

At some point, the intellectuals in charge are going to blow up our financial system to a degree that we never imagined possible.

Just look at what they have done with their balance sheets over the last decade:

The Balance Sheet Bubble - Ready to Burst! chart

The three largest Central Banks have tripled the size of their balance sheets in the past decade. Yet, Janet Yellen believes that the system is now built to absolutely ensure that no financial crisis can ever occur again.

Somehow the financial system is foolproof today with all of this debt added into it?

Maybe it is true, I’m willing to admit I could be wrong on this.

But I’m certainly not willing to risk it by being unprepared for the next financial crisis…

Nonsensical Central Bankers Make Perfect Sense Out of Gold

Look, I don’t want to own gold. I’d rather own something that pays me dividends or interest. I want to own something that grows its income generating ability over time.

Gold doesn’t do any of those things.

However, the reality is that the more I watch what our Central Bankers do and say, the more I understand gold’s appeal.

Look at the investment environment that Central Bankers have created for us today.

Deposits pay next to nothing. Bond yields are exceptionally low.

Sure the stock market is at all-time highs, but that’s because the Fed has irresponsibly kept rates so low for so long.

Meanwhile, our Central Bank balance sheets are so loaded up and interest rates are already so low that they have no ammunition to deploy if signs of a financial panic do emerge.

I fear the risk is greatly skewed in a very unfavorable direction.

To me, the price of gold has less to do about supply and demand and more to do with the confidence the world has in its Central Bankers.

Janet Yellen has confidence the system is foolproof. Which is exactly why I have such little confidence in her.

Keep looking through the windshield,

Jody Chudley

Jody Chudley
Credit analyst, The Daily Edge

Facebook: @TheDailyEdgeUSA

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This straight-up market move is breathtaking! We’re seeing a “full-V” recovery to cap off this amazing momentum move! For months, I’ve said we’ve needed to trade what we see, no what we think. I hope you now understand why…