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Yellow Alert: Key Federal Reserve Planner Bails Out

Written by Gary North on April 9, 2012

The man in charge of the Federal Reserve’s infamous “operation Twist” has just announced that he is quitting. At age 41, hardly anyone quits the FED.

He is at the New York FED, the privately owned branch that is in charge of executing Federal Reserve policy, His name is Brian Sack.

He is the head of the markets group at the NY FED.

He has overseen Operation Twist, whereby the FED buys long-term U.S. government bonds to force down long-term interest rates. This is a subsidy to the mortgage market.

Operation Twist is set to expire on the day Sack retires: January 29.

Will the FED begin a new round of monetary inflation? Or will the FED unwind these positions by selling these bonds?

I think the answers are yes and no. Yes, tyhe FED will inflate. No, it will not unwind.

“I’m dumbfounded,” said Raymond Stone, co-founder of Stone & McCarthy Research Associates, which closely tracks Fed policy. “He laid the groundwork for a lot of things the Fed has done and communicated clearly to the market. He did an excellent job in a difficult environment.”

The FED runs bailouts. Yet this FED official is bailing out.

What does he think is coming?

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6 thoughts on “Yellow Alert: Key Federal Reserve Planner Bails Out

  1. Cigafred says:

    I disagree. Mr. Sack will be richly rewarded in his new position, just as other Fed employees in this same position have been. Peter Fisher, for example, moved from the same position to Blackrock at roughly the same point in his career. People even more senior have moved, such as Jamie Stewart who moved to the Federal Farm Credit Banks Funding Corp

  2. I think you mean June 29, not January 29.

  3. Thanks Joel. I was confused by the Jan. date.

  4. Patriot Diva says:

    What does he think is coming? The excrement will hit the fan no doubt.

  5. The boat is sinking. He is one of hundreds of bank and dirivative firm leaders jumping ship. People get ready, this is going to hurt you more than it will hurt them.