Fed Insider Outlines US Dilemma as Pension Crisis Looms

Featuring Danielle DiMartino Booth

Former Federal Reserve insider Danielle DiMartino Booth has a unique perspective on the internal machinations for the Fed Board, with the first opportunity to change rates since Trump’s victory. Danielle pulls no punches as she connects the dots between the fallout from the election, the Italian referendum, the next moves in the bond market and the impending pensions crisis facing the United States. This interview is not to be missed!

Published on
2 December, 2016
Topic
Politics, Monetary policy, Pension System
Duration
62 minutes
Asset class
Commodities, Bonds/Rates/Credit, Currencies, Equities
Rating
29

Comments

  • KS

    Kim S.

    19 2 2017 13:48

    2       0

    Agree this is a great interview. I also understand the viewers that want more solutions. Here's your solution: get out from behind your desks. Passive investment was a leisure of the expanding monetary system. Make sure you have a skill that is useful outside the financial system. Accept that you don't need to be in the top 5% to have a good quality of life. And if you are too old to work through this then yes, gold, is a good answer. That's how people saved their excess earnings for millenia: with real money.

    The problem is in the question, if you think you must easily stay wealthy while the globe goes through a major financial correction.

  • WP

    William P.

    15 12 2016 02:19

    2       0

    Grant, Richard Koo raised the point that the issuance of either Redemption Bonds or New Money Bonds will be required on account of the bonds on the central bank balance sheet (e.g., upon maturation). If he's not wrong, then why not press the point when DDM talks about the assumption that bonds on the central bank balance sheet represent a permanent reduction in supply? Unless Koo was wrong in Escape From A Balance Sheet Recession, the successful returning of the central bank balance sheet to normal levels is a riddle with no known answer (forgive my paraphrase).

  • TR

    Thomas R.

    11 12 2016 23:20

    0       0

    I'd love to get Danielle's take on the strategy or possible course of action that the Treasury and the Fed agree to waive the Treasury Securities owned by the Fed - especially after another round of QE and perhaps something that the Bank of Japan will lead the way on with regard to their own debt. Fed's Dec 7th Balance sheet reflects approx 4.49T of Assets of which 2.46T are Treasuries and 1.74T are MBS. The remaining 0.29T are other assets. From this perspective, doesn't the 2.46T owned by the Fed take our $20T of US Debt down to 17.6T?

  • KS

    Kathleen S.

    11 12 2016 14:58

    2       3

    MS M. You will never understand what I am saying if you continue to seek information in the same echo chamber. I am asking you to look up Diane Ravitch who has no dog in the fight and she will give you a true assessment of the charter school lies. The two you are suggesting are more shills. Charters are the corporate take over of a public domain to benefit those at the top, it is part of the neoliberal agenda. Copy this link and it will tell you why Wall Street is all hyped on charter schools. www.youtube.com/watch?v=8y9ya3bBlIM and believe me it is not to help the poor kiddies.

  • MM

    MZ M.

    11 12 2016 00:27

    1       0

    Kathleen S. and Fred S. - Tom Sowell and Walter Williams have spoken on this topic u guyz are discussing if that helps add anything to your discussion??

  • KS

    Kathleen S.

    10 12 2016 20:02

    3       0

    Fred S - You are darn right you struck a nerve - to listen to bankers and billionaires bashing urban teachers as the reason the inner cities are failing (kind of like what you did) makes me want to scream. Once you actually start to examine this simplistic argument you realize it is a complete fallacy manufactured to justify the 1% stealing (yes stealing) public funds and placing them into their private hands. Do you truly believe that someone like Michael Milken the convicted junk bond king has changed his stripes - just check out his success in charter schools. I will refer you to Diane Ravitch who is the premier expert on the history of the educational system in this country - hmm? Wonder why she wasn't featured in Waiting for Superman - look her up and see what she has to say about charters. WFS 's argument is that the only culprit for failing schools is bad teachers get rid of them and the rotten union that protects them and all will be right - it couldn't be ...... globalization or deindustrialization or poverty or our coarse popular culture or predatory financial practices that bear responsibility. Failing schools are not the problem they are the symptom of a problem - I am done arguing my point - look up Ravitch or Glenn Ford if you like and they will fill you in on how the predator class once again (like with mortgages) milks the poor and uses shills like Oprah Winfrey and propaganda pieces like WFS to have them believe that they actually care about them.

  • FS

    Fred S.

    10 12 2016 16:31

    1       0

    Kathleen S - I think I've struck a nerve. My take away from WFS regarding urban schools is that kids have been dropping out for decades causing urban neighborhoods to be filled with unqualified/underqualified job applicants causing businesses to shun those areas causing reduced tax revenue causing more underfunded schools. Kids get bored with it, so they drop out. No strong family life to keep them in school, so the cycle perpetuates. That's been my personal observation as well. Charter schools are one way to try to counter and break the cycle. So, I'm sincerely interested - what are the half truths and mistrepresentations contained in the documentary?

  • KS

    Kathleen S.

    10 12 2016 14:08

    4       1

    Fred S - I actually work in urban education and have seen the propaganda piece called Waiting for Superman - it is full of half truths and some out right misrepresentations. You want to know the truth about urban education it is simple the truth is the kids fail because most live in terrible poverty and all that comes with it (homelessness, parents in prison, one family households, and a list of abuses neglect, physical, sexual, emotional etc. For some reason people seem to think poor children are just like middle class kids and are suffering from poor teachers and unions that are holding them back. That is a bunch of crap, just like it is to believe that bankers (who see nothing wrong with fixing rice prices that left millions hungry a few years ago) would actually care about poor children. IT IS ABOUT MONEY as always and the neoliberal agenda to privatize the school system so rich hedge funds can pay teachers nothing and collect all the public funds for themselves pure and simple. FYI most charter schools do as bad if not worse than urban public schools and they get to cherry pick the good students. Street Fight was the documentary made about Newark public schools and the guy that did it is the nephew of Eagle Capital founders-- it was another propaganda piece - you guys got to wake up to the neoliberal agenda that is destroying this country and the real economy. Also people need to do some real investigation on their own, don't just believe everything a banker says.

  • GH

    Gloria H.

    10 12 2016 14:06

    2       0

    really, really, REALLY enjoyed this, but people should know thta the Brooklyn Bridge march by mothers in support of charter schools was organized by Eva Moskowitz, CEO of a for-profit charter schools administrator, and both students AND THEIR PARENTS were required to participate. http://gothamist.com/2013/10/08/thousands_of_charter_school_support.php

  • AG

    Alex G.

    10 12 2016 00:56

    0       0

    Booth 2024 Dem or Rep idc

  • B

    Bojo .

    9 12 2016 14:42

    2       1

    A brilliant and truthful discussion, and a very charismatic woman. I had a walk in the park at night a while ago: there was a huge group of 25 year-olds playing something like Pokemon go. It was a terrifying thing to watch : )

  • AL

    Anthony L.

    9 12 2016 02:33

    0       0

    One of the best interviews I've seen here, and that's saying sometthing!

  • CH

    Calvin H.

    8 12 2016 04:31

    6       1

    Yes a good interview, but all this doom and no discussion on how it plays out, aka 4th Turning or how to protect/avoid, is getting old

  • JT

    Jayne T.

    6 12 2016 22:03

    1       0

    Great interview. The bank stocks are smoking, along with a number of publicly traded life insurance companies. I can see why she said it's a good time for Jamie D. to get out.

  • LP

    Lynn P.

    6 12 2016 20:54

    9       1

    Great interview, maybe the best I've seen on RTV . . . but the last five minutes were so . . . just right. I'm a psychologist and this "soft underbelly", being enabled by the educators who are supposed to educate is so worrisome. The entitlement is simply dangerous, along with the naivete.
    Well done for putting this in words, that need to be said.

  • SS

    Sam S.

    6 12 2016 13:07

    0       0

    What can I say that hasn't already been said? Excellent!

  • AC

    Andrew C.

    6 12 2016 04:53

    0       0

    @PAVEL G; True about real trade opportunities (or lack therefore) in Italy. But “balanced”? Too many smart people are saying the same thing. It is similar to the climate debate; 1-on-1 debate isn’t not balanced when 98% of scientists support one side! Personally, I think that Trump’s election and speading-spree allows this fiasco to go on for a bit longer, 2 years or more….

  • AC

    Andrew C.

    6 12 2016 03:39

    1       3

    Still watching, so an early comment....
    "implementing minimum wages isn’t going to help profit margins”.
    No but it will help the economy grow.

    http://ritholtz.com/2016/12/seattle-min-wage-update/

  • CM

    Carl M.

    6 12 2016 03:37

    3       3

    That smokin' hottie scares the shit out of me!!

  • NP

    Nick P.

    6 12 2016 00:03

    1       0

    I'm gonna do it! I'm gonna jump!

  • SA

    Scott A.

    5 12 2016 18:28

    5       0

    Excellent discussion. The pension issue is becoming a larger albatross by the day. Thanks for the frank discussion.

  • PG

    Pavel G.

    5 12 2016 17:58

    4       17

    One suggestion RV can you please be a bit more balanced with guests and maybe and not so negative on everything all the time. Italy trading today on THE worst outcome shows everyone thought the same

  • MA

    Mark A.

    5 12 2016 16:19

    1       0

    Great interview. However, the Economist supported a No vote. http://www.economist.com/news/leaders/21710816-country-needs-far-reaching-reforms-just-not-ones-offer-why-italy-should-vote-no

  • CB

    Cliff B.

    5 12 2016 13:15

    2       0

    Grant,

    Excellent as usual, thanks

  • NR

    Nuno R.

    5 12 2016 11:22

    2       2

    Brains and beauty, killer combination. Great interview.

  • AB

    Alain B.

    5 12 2016 06:13

    2       0

    One of the quickest hour spent on RVTV, exceptional interview.

  • SD

    Stephen D.

    5 12 2016 05:57

    8       2

    As a natural contrarian I wanted to put my voice against the universal praise for this piece. But now I think "who are the 12 people givng it the thumbs down?" Maybe some idea of how to avoid the catastrophe would have helped. Or if unavoidable, where to hide. I know many here will say GOLD! what else?

  • CA

    Craig A.

    5 12 2016 03:44

    7       0

    Absolutely fantastic interview. Loved the general theme of going through total macro of various countries. Shes also a great interviewee - entertaining, witty, and talks about whats happening simply. Loved it

  • JD

    John D.

    5 12 2016 03:41

    1       0

    One of Your Best... Great Stuff !!!

  • RB

    Robert B.

    4 12 2016 23:27

    13       0

    I love this woman! Thumbs up if you like this trade: Yellen out, Danielle in as head of the Fed.

  • GE

    GABI E.

    4 12 2016 13:26

    1       0

    Very interesting interview !!! Thank you.

  • TE

    Tim E.

    4 12 2016 10:08

    5       0

    Puppies and Playdough. Bravo Grant!

  • TW

    Tom W.

    4 12 2016 03:26

    7       0

    Enjoyed the interview immensely; however, asked but not answered, "what are investors to do?".

  • MM

    MZ M.

    4 12 2016 02:40

    0       0

    Man that was a fast hour! Thank you DDM and GW

  • RP

    Ron P.

    4 12 2016 02:31

    2       0

    One of the best interviews yet!

  • BL

    Bernhard L.

    4 12 2016 01:48

    6       0

    Absolutely fabulous interview. No sugar coating...call it like it is. Time to buy more Gold I guess....

  • LR

    Luigi R.

    4 12 2016 01:08

    1       0

    Great interview...however, I was on the edge of my seat waiting for the answer to the question on the dollar and what happens if it keeps on with its upward trajectory. Or more importantly, what can be done to avert it? Can the fed normalize rates and print at the same time?

  • CC

    Charles C.

    4 12 2016 00:08

    4       0

    So much to think about - pensions, social fabric dissolving, China meltdown, Italy and the EU in trouble, etc. A great interview despite the troubling topics.

  • TS

    Todd S.

    4 12 2016 00:01

    3       1

    Immense value from this discussion.

    Thank you both !

  • DF

    Dominic F.

    3 12 2016 23:37

    12       0

    What? Only an hour? Fantastic discussion as opposed to an interview. Sharing your ideas in this way makes for a richer discourse sometimes. In Danielle's case it works. This conversation has set a new benchmark in honesty and clarity, not too technical and a pleasure to watch.
    I couldn't help watching all the traffic in the background and wondering if they even have a clue whats coming. The victims again of egos gone mad in the corridors of power from people who again will take zero responsibility for their decisions and actions.
    Another reason to subscribe to Real Vision.

  • JC

    Justin C.

    3 12 2016 23:05

    1       0

    Fabulous. Thanks to both of you.....just great.

  • CK

    Colin K.

    3 12 2016 20:27

    1       0

    The most profound and stimulating interview you've done this year.

  • MV

    Michael V.

    3 12 2016 19:40

    5       1

    Really good interview. I've been thinking about this pension thing for years, and would love to see more on RealVision about it. Danielle is great, and nice job by Grant here.

  • DP

    David P.

    3 12 2016 19:23

    12       0

    A very interesting interview, very intense, with a lot of "intellectual shorthand" at various points in this fast-moving conversation. For instance, at one point Danielle said: "Meredith was right--just early" referring, I presume, to Meredith Whitney's famous call for the collapse of the muni bond market, what, seven or eight years ago?

    Several hours after I finished watching this, I wondered about a comment that Danielle made that, paraphrasing her, "no central bank can ever sell a bond off its balance sheet--ever again" unless they ignite a storm of selling in the bond market and a catastrophic, uncontrolled rise in rates--provoking the biggest bond panic in the history of the world. I guess I understand this, except that when the Fed raises interest rates, don't they have to do precisely that? Sell bonds? At least this is what John Hussman says, that in order in raise interest rates even 25 or 50 or 100 basis points, the Fed would have to liquidate--literally--hundreds of billions off their balance sheet. And isn't this why the Fed said (a few years ago) that they were "experimenting" with other "tools" that they could use to manipulate rates (like "reverse repos") without having to fall back on standard open-market operations--selling bonds into the open market to raise rates?

    Any comment from anybody more knowledgeable than I am about this?

  • FS

    Fred S.

    3 12 2016 14:31

    4       2

    @Kathleen S. (and everyone else) - I'm glad that education was discussed although briefly. Check out the documentary Waiting for Superman to get a real view into the pathetic state of primary education in America. Post secondary is getting to be no better as I see the upcoming spoiled generation clamoring for free tuition. Something with no cost will ultimately have no value either.

  • VS

    Victor S.

    3 12 2016 14:26

    2       3

    Well done ,but what is her endgame investment? No what to do ? Let me help .... right now Gold and Silver and the grains are the most undervalued investments in the world. To put it in perspective the ave price of gold in 1970 was$ 36.02 and in 1980 the average was $615. That is a 32.8% compounded rate of return. If gold compounded at 23.8% for 10 year as of the close on 12/2/16 thats $10,000.

  • JL

    Jack L.

    3 12 2016 14:05

    1       1

    Superb, my only comment is on scheduling....could it not have been released earlier given Sunday's vote

  • MS

    Michael S.

    3 12 2016 13:30

    3       0

    Wow, worth my subscription on it's own. They just keep getting better.
    However, really scarry

  • PB

    Pieter B.

    3 12 2016 12:16

    2       0

    Fantastic interview! Massive thanks for the insights, projections and great analysis. Keep it up!

  • KS

    Kathleen S.

    3 12 2016 11:01

    6       14

    Her charter school reform argument is BS - let's not fool ourselves, nobody cares about the poor - especially not hedge funds, or bankers - it is all about the money. The reason why poor kids fail at school is not because of their school (that is a fallacy), they fail because of poverty and all that entails (parents on drugs, in jail, homelessness, physical and emotional abuse etc.). Lets be real when Michael Milken is interested in charter schools it tells you something. The bankers see a big pot of public money and they want it for themselves. Give me a break.

  • TH

    Timo H.

    3 12 2016 09:49

    0       0

    So good (and anti-establishment) that it has to be fake!

  • BM

    Bryan M.

    3 12 2016 07:19

    0       0

    Wow - Another great interview with GW and...a great interviewee for sure. Well done and well said by both of you.

  • CD

    Charles D.

    3 12 2016 04:23

    1       0

    I'm an original charter member of RV

  • TS

    Thomas S.

    3 12 2016 03:33

    8       0

    Brilliant interview. Ultra respect for smart, tough, women who fought hard to get where they are like, DDM, Pippa, and Merideth Whitney. Takes mega guts beat the tables against the herd on top of that.

  • GS

    Greg S.

    3 12 2016 01:37

    4       0

    "A big boo boo"? WTF applies here. What an outstanding interview on both your parts.

  • RA

    Robert A.

    2 12 2016 23:54

    12       0

    WTF, indeed. This just might be the best one of them all. I told Grant she would be well received, but the back and forth between them exceeded all my expectations. The timeliness of this interview is remarkable. How great to have RV's stable of Pros available for roll out as that little curator Milton degrees. I would go on with my kudos....but I've got to queue up Danielle's first RV interview immediately. Hats off again to Grant, Raoul, Milton, and some incredible "behind the scenes" folks at RV as well!

  • mc

    mark c.

    2 12 2016 23:46

    3       0

    What did she mean by metals revolution?

  • JS

    John S.

    2 12 2016 23:39

    2       0

    A real pleasure to listen to....

  • GP

    Greg P.

    2 12 2016 23:35

    11       0

    I was mesmerized by the whole interview.I really enjoyed listening to a person who is much smarter than me and pulled no punches.And I trust Danielle has a car with working brakes,now.Up here in Canada, in the winter,a car without brakes is called a toboggan.

  • RP

    Raoul P.

    2 12 2016 23:25

    17       0

    Absolutely brilliant! DD and GW at their absolutely best. Fabulous stuff.

  • db

    don b.

    2 12 2016 22:29

    1       14

    Great interview Danielle DiMartino Booth but you are wrong on oil. But hey we all make mistakes but it shows how much complacency there is in the oil market right now. Oil is going higher which just makes it all more interesting.

  • M

    Mark .

    2 12 2016 22:14

    9       1

    Great interview. The end of that makes me request that you have David Stockman on, please. http://contrakrugman.com/ep-60-krugman-copes-with-trump-special-guest-david-stockman/

  • DS

    David S.

    2 12 2016 22:11

    11       0

    The millennials are rapidly adapting to Dee Smith's globalization, hyper-connectivity, automation and robotics by developing the sharing economy. Someone will also have to stay at home to take care of parents in their elder years as it has been done for thousands of years. The markets will make us pay someday for the 2008 Wall Street "out of control" greed that is the genesis of our financial problems - not the Fed. The notion that our kids will always be richer than we are is at an end. Let's hope they will be a whole lot wiser than we were.

  • PV

    Peter V.

    2 12 2016 21:56

    5       0

    Great stuff. Underfunded public plans are an unspoken of reality. .

  • db

    don b.

    2 12 2016 21:50

    10       0

    The moral of this story is buy gold & gold stocks. (Now)

  • AG

    Alex G.

    2 12 2016 21:33

    0       0

    Can someone expalin a bit more the relationship between pensions and PE. I didnt quite catch her drift around the 20 min part

  • dm

    douglas m.

    2 12 2016 21:22

    3       15

    Interesting interview I admit I enjoyed and watched it twice, but... does she not have the odour of a professional doom & gloom propagandist?
    Blind to any positives and, with tunnel vision, exaggerating the probability and severity of negative possibilities, regardless how unlikely. The sky is falling.

  • DS

    David S.

    2 12 2016 20:04

    2       0

    The Fed should raise rates in December as the markets are already ahead of them. It would be better if the Fed does not discuss 2017 as no one knows which way President Trump will actually play his cards, or even what cards he has to play. Speculation is fun, but not very productive.

  • mm

    miguel m.

    2 12 2016 20:00

    15       0

    An absolutely riveting, powerful interview from a tremendously inspirational woman. What a marvelous role model Danielle is for the next generation. This interview is so vital and timely and should be made available as a PSA for the public. Bravo Grant for such engaging questions.

  • AD

    Anton D.

    2 12 2016 19:57

    9       2

    At times a bit too dramatic for my taste, in Jennifer Aniston fashion, with cutesy eye-rolling, voice control etc., but beneath it all- powerhouse of a brain, making for great, great content. I almost jumped out of my Russian man-pants on min 23- at the question of what should investors do- alas, no answer that I could discern. Pity!

  • EL

    Elizabeth L.

    2 12 2016 19:39

    23       0

    Fabulous discussion by both of you. So many questions I have you explored. The best discussion on the Italian referendum I've heard or read so far. Delving into the Fed at Danielle's level of knowledge was invaluable. You both did a great job of fleshing out in real life what is happening to the US pension system. I like many others would like to see a discussion between the two of you as a regular feature. I know that this was an interview, but I call it a discussion because your input Grant was so very valuable. Thank you both.

  • RB

    Rob B.

    2 12 2016 19:37

    7       0

    She had worked with Dallas Fed and I always appreciate her POV when she is on Fin News networks. Straight talk and no "fed talk".

    Best line on RV was by Grant - "when WTI turns into WTF"

  • HJ

    Harry J.

    2 12 2016 19:30

    10       0

    Ok Grant you just set your high water mark!
    You were both brilliant I'll have to watch it many times to get over the stunned reaction to this.
    Really great in every respect!
    Thank you all at RVTV.
    I d

  • JM

    James M.

    2 12 2016 18:47

    5       0

    Excellent!
    But frankly very seriously foreboding. That is one deep dive into a possible future which is just plain beyond what I wish to imagine in my future.

  • CU

    Clay U.

    2 12 2016 18:46

    2       0

    Fantastic! Thank you both for a great interview!

  • A1

    Animal 1.

    2 12 2016 18:09

    21       0

    Brilliant mind. We need her and Jim Grant to run the Fed :-)

  • ps

    phil s.

    2 12 2016 17:33

    7       0

    As usual Danielle is clear and paints as realistic a picture as you can ask for. We need more like her beating the drum! Well don

  • BF

    Bruce F.

    2 12 2016 17:29

    6       0

    simple, she MUST be a new member of the Board of Governors on the Fed.

  • fc

    frank c.

    2 12 2016 17:14

    6       0

    WTI turning into WTF! really enjoyed this!

  • RM

    Richard M.

    2 12 2016 16:15

    44       0

    My God, this is why I am so thankful for RVTV and all that it brings!!! Such brilliance, Danielle is such a bright light on the economic horizon. And Grant is just such a brilliant interviewer - it's like a friendly conversation by two brilliant people discussing very deep and important subjects but somehow amazingly making it comprehensible to the average observer (OK, the RVTV community is not your "average" observer but you get my point ). I almost wish Daneille would lend her brilliance to the new incoming administration, but then I would lose her weekly commentary that I enjoy so much. Am I being too selfish? :-)

  • SS

    Stephen S.

    2 12 2016 16:02

    0       0

    Great work! Keep it up guys.

  • EK

    Emil K.

    2 12 2016 15:57

    5       0

    If you enjoyed the interview there's much more at Dimartinobooth.com, which I do recommend.

  • CB

    C B.

    2 12 2016 15:41

    19       0

    Brilliant insights. Need to have her on regularly b/c understanding monetary policy and the Fed's inner workings has become crucial to preparing for what comes next for the financial markets.

  • JV

    JACK V.

    2 12 2016 15:28

    4       0

    First class. Thank you.

  • MT

    Mark T.

    2 12 2016 15:25

    19       0

    Awesome interview. Bring her back soon!
    Grant - you did the best job of interviewing I've seen in a long time.

  • JS

    Jon S.

    2 12 2016 14:18

    19       0

    Great interview! I am so glad I pulled the plug on regular TV and subscribe to RVTV. Instead of being 'propagandized' and 'commercialized', I get to think again. Thanks RVTV!