With the pullout of Larry Summers as the prime candidate to be the next Federal Reserve Chairman, the new front runner is the current Vice-Chairman Janet Yellen. As as Peter Schiff noted in an interview on Sept. 25, Yellen's historical comments and QE policies will assuredly make her go down as the worst Fed Chief ever, even surpassing Ben Bernanke and Alan Greenspan.
Jeff Macke, Yahoo Finance: Let's talk about Janet Yellen though, because we need to discuss this... what's going to make her worse than what Bernanke's doing now?
Peter Schiff: Well I think she is going to be even easier. If you recall, she was a governor who is in favor of negative interest rates. She argued that rates should be negative, and people should actually be punished or penalized for saving money.... more so than what they are losing just through inflation. They should actually have part of their savings confiscated.
I used to think that Alan Greenspan was the worst Fed Chairman we ever had, until Ben Bernanke was appointed... and he kind of let him off the hook. And my guess is that Janet Yellen is going to return the favor and Ben Bernanke is not going to go down in history as the worst Fed Chairman. - Yahoo Finance
Janet Yellen's ineptitude for seeing monetary and economic crises is best summed up in a speech she gave at the 2010 Financial Crisis Inquiry Commission where she said, “For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened."
Ironically, it was Peter Schiff, along with economists such as Gerald Celente, Nouriel Roubini, and Mark Faber who predicted the housing bubble, credit crisis, and eventual Great Recession, while the governors and other members of the Fed were clueless to the impending events that took place in 2008. This makes Schiff's assessment of the Fed, and the potential appointment of Janet Yellen to the office of Chairman carry a great deal of weight.
It is alleged that Janet Yellen is the true architect of Quantitative Easing, and the driving force behind keeping interest rates at near zero for several years. Thus it is very likely that her Keynesian based monetary policies will only increase on the side of money printing and stimulus, verses the taper effect suggested by more conservative members of the governing board. If this is the case, then the American people will be the primary ones to suffer as inflation, and a continuing rise in unemployment helps increase the wealth disparity between the rich and middle class that has been the real legacy of QE.
Just as Herbert Hoover is credited in history as the President who brought America into the Great Depression, so too does economist Peter Schiff believe that Janet Yellen will be the rightful scapegoat during the coming economic collapse. And whether she does assume the position of Fed Chairman at a time in history where great change is taking place, her monetary policies will likely label her as being the worst Fed Chairman ever.