In this retort to his critics, David Stockman offers up this gem of an assessment of the Federal Reserve’s zero interest rate policy in an interview at Marketwatch:
In the world ahead, there is such a huge collapse coming in the financial markets, the third one since 2000, it’s better to preserve your capital, stay liquid, keep your head down, don’t borrow money unless you absolutely have to. That is very discouraging because people would like to earn a return on their savings.
That is why the current monetary policy is so profoundly wrong. When we have this character Rosengren up in Boston saying, it’s a good thing, we are trying to induce people to go into risk assets. Who in the hell is Rosengren to tell old ladies of America they have to buy junk bonds because the Fed tells them to. If the old ladies feel safer in a CD, they ought to be able to earn something besides dog food money on it. There is going to be a revolt against these arrogant mandarins running the Fed, they will rue the day they arrogated to themselves such massive power.
Of course, the official Fed line is that zero interest rates and record money printing will restore economic growth and create jobs, to which Stockman replies, “If our low rates could get companies to invest more, and if dogs could whistle the world would be a chorus”.