The Fed’s Doomsday Prophet Has a Dire Warning About Where We’re Headed
Thomas Hoenig knew what quantitative easing and record-low interest rates would bring.
Thomas Hoenig doesn’t look like a rebel. He is a conservative man, soft-spoken, now happily retired at the age of 75. He acts like someone who has spent the vast majority of his career, as he has, working at one of the stuffiest and powerful institutions in America: the Federal Reserve Bank. Hoenig has all the fiery disposition that one might expect from a central banker, which is to say none at all. He unspools sentences methodically, in a measured way, never letting his words race ahead of his intended message. When Hoenig gets really agitated he repeats the phrase “lookit” a lot, but that’s about as salty as it gets.
This makes it all the more surprising that Tom Hoenig is, in fact, one of America’s least-understood dissidents.
In 2010, Hoenig was president of the Federal Reserve regional bank in Kansas City. As part of his job, Hoenig had a seat on the Fed’s most powerful policy committee, and that’s where he lodged one of the longest-running string of “no” votes in the bank’s history.
Hoenig’s dissents are striking because the Fed’s top policy committee — called the Federal Open Market Committee, or FOMC — doesn’t just prize consensus; it nearly demands it. The committee likes to present a unified front to the public because it is arguably the most powerful governing body in American economic affairs. Hoenig’s string of dissents shattered that appearance of unanimity at a critically important time, when the Fed was expanding its interventions in the American economy to an unprecedented degree. It was a hinge point in American history, and the economy has never been the same since.
Between 2008 and 2014, the Federal Reserve printed more than $3.5 trillion in new bills. To put that in perspective, it’s roughly triple the amount of money that the Fed created in its first 95 years of existence. Three centuries’ worth of growth in the money supply was crammed into a few short years. The money poured through the veins of the financial system and stoked demand for assets like stocks, corporate debt and commercial real estate bonds, driving up prices across markets. Hoenig was the one Fed leader who voted consistently against this course of action, starting in 2010. In doing so, he pitted himself against the Fed’s powerful chair at the time, Ben Bernanke, who was widely regarded as a hero for the ambitious rescue plans he designed and oversaw.
Wealthy investors want to own a little less of the everything bubble in 2022
- More millionaire investors think the economy will be stronger in 2022 than those who believe it will weaken, according to the recent CNBC Millionaire Survey.
- Just over half expect the S&P 500 to finish next year with a gain of at least 5%.
- But overall, the survey of wealthy Americans finds little appetite for more risk within investment portfolios.
Basic Income Programs Go Mainstream…
(Bloomberg) — At least 20 guaranteed income pilots have launched in cities and counties across the U.S. since 2018, and more than 5,400 families and individuals have started receiving between $300 and $1,000 a month, according to a Bloomberg CityLab analysis. If all these programs complete their pilot periods as planned, they’ll have given out at least $35 million.