Grant Interest Rate Observer Yellen on deck NOVEMBER 16, 2012
If Chairman Ben S. Bernanke is the deep thinker-in-chief, the Fed’s vice chairman, Janet Yellen, is his principal doppelgänger. She is as dependable a voice as there is on the Fed for radical experimentation—on Tuesday, she urged that the FOMC hold the funds rate at zero until the unemployment rate and the inflation rate meet with the mandarins’ approval. Gold bulls should light a candle on her birthday, August 13, and pray that she rises to lead the Fed when it’s time for the chairman to go. If Bernanke is good for, let us say, $3,000 an ounce in the bullion price, Yellen is a force for $4,000. If, at the close of Bernanke’s term in January 2014, he chooses to step down, or is chosen to step down, she would be a strong contender to succeed him.
The holder of a Ph.D. in economics from Yale University, Yellen has every necessary credential to manage the pure paper monetary system. Chairman of the Council of Economic Advisers under Bill Clinton, a onetime Fed governor, a one-time president of the Federal Reserve Bank of San Francisco and a former professor at the Haas School of Business at the University of California at Berkeley, Yellen has taught, as well, at Harvard University and the London School of Economics. And while it is true that she was presented with the Adam Smith Award by the National Association for Business Economics, that honor should not be counted against her in the running to manage the institution that strives to manage the economy by manipulating the value of the currency. She has no slavish attachment to the price mechanism. On the contrary, she’s foursquare for mandarin rule.