What Albert Einstein Thinks About Janet Yellen & The FED

Vice Chair of the Board of Governors of the Federal Reserve System Janet Yellen

I disagree with Peter Schiff on a lot of things, but he might be right about the FED’s inability to raise interest rates over the next few months/years. Assuming the FED knows that we are in a gigantic bubble that is about to pop. Again, their past actions bring that into question. You can watch the video here Schiff: The Fed is afraid to pop a bubble

Here is the question I have. I believe the next round of QE is out of the question, until and unless various asset prices go through a substantial drop. So, if the FED forgoes raising interest rates, at what point does this financial bubble collapses under its own weight?

I have a fairly good idea, based on my stock market mathematical and timing work, but I will leave it up to you to decide. If you don’t think that there is a bubble or that it will collapse, keep buying equities.It is as simple as that. However, if you do believe that there is a bubble, the FED’s actions become inconsequential. The bubble will blow up either under its own weight or as soon as the FED signals the first hike.

With that in mind, perhaps we should listen to what Albert Einstein thinks about all of this.

Einstein dies and goes to heaven only to be informed that his room is not yet ready. “I hope you will not mind waiting in a dormitory. We are very sorry, but it’s the best we can do and you will have to share the room with others” he is told by the doorman.

Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants. “See, Here is your first room mate. He has an IQ of 180!”
“Why that’s wonderful!” Says Albert. “We can discuss mathematics!”

“And here is your second room mate. His IQ is 150!”
“Why that’s wonderful!” Says Albert. “We can discuss physics!”

“And here is your third room mate. His IQ is 100!”
“That Wonderful! We can discuss the latest plays at the theater!”

Just then another man moves out to capture Albert’s hand and shake it. “I’m your last room mate and I’m sorry, but my IQ is only 80.”
Albert smiles back at him and says, “So, where do you think interest rates are headed?”