These are the words inscribed on the currency of the United States of America. Among other things the words are meant to invoke the faith and trust of people to accept our currency as legal tender. As it is with money so it is with the Federal Reserve (Americas banker)--confidence and belief that it is something more than it is, is what gives it power. The more people believe the more power it has.

Activism has the ability to affect the public perception of the Federal Reserve. Investors are constantly altering their investment holdings to reflect changing events (This is also called discounting. The greater the probability of an event change or news that will dramatically affect the market the more investors will change their portfolios.) Investors will change their investments, even infinitesimally, should they begin to believe that the Fed head Protest might bring scrutiny to the Federal Reserve and its policies. (Think of it like the dynamic of a public action and the response it elicits. It can evolve quickly and take on a life of its own.) The market will begin to discount, or re-adjust their investments to reflect the probability in their opinion of how much the Fed can continue to operate carte blanche with only their interests in mind. This reduced clout will start the snowball rolling down the hill and raise more questions about the Fed, which will raise more questions…

The mind numbing amount of economic data churned out by government agencies, Fed gatherings and meetings, speeches by Fed governors and testimony by the Fed Chairman will provide a host of opportunities for potential actions. This will help maintain momentum, raise awareness and put further pressure on the Fed. By employing the information used by the markets for actions we have the ability to turn the tables on the market itself.

Activism is ideally suited to affecting change of the Federal Reserve.
It is a market based strategy in a market based world!

QUESTION: Traditionally activism tries to get politicians to change. Where does the legislative branch fit in all this?

Long ago I learned as a money manager to take your losses and to forget about them and move on. Similarly I have come to believe that we have lost the political process to money. Money runs Washington--end of story!

For many Americans this is a difficult and cold proposition to accept. We are brought up believing in democracy, fairness and justice. But the lessons of life are that we have to accept losses/grief/hardship and move on. Most Americans believe that money runs Washington--so why do we continue to think we can affect change by pleading with Congress? Sure we can get some minor changes pushed through, but major changes…?

At some point we will have to deal with Congress, but that is a long way down the road. Congress will have to listen if we bring enough pressure on the Fed. After all, we will be crippling the bagman for special interests.

Back to the Fed Head Protest