Retired CEO of CHIPPEWA PARTNERS, Native American Advisors, Inc., now managing the Parisian Family Office. A White Earth Chippewa, raised conservative, growing up in the poorest county in the U.S. on the Pine Ridge Indian Reservation, he began a Wall Street career in 1982. Always been, will always be, an optimist. In a world on a dopamine binge, this is his take on life from Ghost Ranch in MT, Pamelot, his TN farm or their home in San Jose del Cabo, Mexico.
Tuesday, February 21, 2017
After years of veiled suggestions by market skeptics that the Fed's two core mandates, inflation and employment, are just a cover for its real "third" mandate, namely supporting asset prices, today the president of the Minneapolis Fed came confirmed just that when during a meeting of the Financial Planning Association of Minnesota in Golden Valley, Minnesota, he said that “really we have a third mandate and the third mandate is financial stability.”
Kashkari also said that “at some point in probably the not too distant future” the central bank will begin to allow balance sheet to shrink via roll off although he added that “it probably won’t be as small as it was before because the U.S. economy continues to grow, but it will be smaller than it is today.”
Kashkari also said that “we are keeping our eyes open for asset prices to try to look for signs of bubbles” but admitted that it is "very hard to see asset bubbles in advance."
The regional Fed president also said that while wages have come up "they're not at alarming levels." Of course, if one looks at real, inflatiob-adjusted wages, they are actually down for the first time in years.
Preempting what are likely to be major changes in the Fed's structure under president Trump, Kashkari said that "protecting Fed independence is enormously important."
Kashkari, the golden tool of the Minneapolis Fed speaks again. He reminds me of Bernanke in so many ways. The only mandate they had in 2008 was to keep the ship upright for the Democrats to bail out the gravy train in Bankerville. I spoke about the joke on the American people in this blog about the inflation/unemployment mandate back then. It's a larger joke now, $10,000,000,000,000 in debt later. Maybe Kashkari and his crew should talk to a few who made obscene profits off the last bubble. They saw it clear as day. I guess when your own institution is behind the current bubble it is difficult to see and to think clearly.
The real mandate of the Fed is to enrich its owners. Did I miss anything?