* I'm on vacation this week but I did take a little time out to little time out to listen to Janet Yellen's semi-annual "Humphrey-Hawkins" testimony - she testified first before the Senate, that was yesterday and today she was before the house

* It used to be a lot more interesting with Ron Paul was on the house banking committee and you could see Ron Paul asking questions to Ben Bernanke

* I really would like to hear Rand Paul questioning Janet Yellen but unfortunately, we don't have that opportunity

* Also, the big news, we are on the eve of the Brexit vote in the U.K.; it's going to be on Thursday

* Polls of investor sentiment show the remain camp is firmly in the lead

* Betting certainly shows that more money is on the remain, but more people are betting on leave

* Probably, though the remain camp will carry the day; the forces of big government are very hard to overcome

* Nowhere is big government better exemplified than in the case of the Federal Reserve, which is the combination of big government and central banking

* Janet Yellen's testimony, I thought, was relatively boring, but I'm going to go over some of the more important tidbits

* Yellen keeps referring to the recovery that appears to be on track and the rate hike is just around the corner

* All this is nonsense - if the Fed were going to raise rates, they would have already done so

* One senator or congressman asked Yellen about the box the Fed might be in because the rates are still so low, what tools does Yellen have to fight off the next recession

* Yellen confidently replied that we have all the tools we've always had, which is true

* They still have those tools; the problem is that these tools have never worked

* They can't cut rates, much, they can print all the money they want, they can do QE4, it can be bigger than QE3, and  it probably will be

* Even though Janet Yellen, in response to a direct question about negative interest rates, said that she didn't think the Fed would go there, well we'll see

* When push comes to shove they may be more willing to go there than they are right now because they still want to pretend that the recovery is on track, so why even bring up negative rates when you're talking about raising rates

* So I think once the conversation turns then negative rates may be a more serious consideration

* One of the congressmen asked about Puerto Rico and Janet Yellen said, "No, there's nothing we can do, Puerto Rico is on it's own."

* I wish the Fed would have had the same attitude about the mortgage market

* The Federal Reserve has no problem buying up toxic mortgages but they wouldn't touch Puerto Rican sovereign debt with ta 10-foot pole

* Which leads you to believe how risky that debt much be

* I wish the Fed would do the same thing to the U.S. government - force the U.S. government to make those tough choices

* In fact, there was a House member, today, who talked to Janet Yellen about the independent central banks and Janet Yellen bluffed, that if interest rates, and that was a problem for Congress, that Congress would have to deal with the problem

* I don't believe her for a second

* I believe on of the reasons, specifically that Janet Yellen doesn't want to raise rates is that she knows that will complicate the budget situation in Washington because the Federal Government can't afford to pay higher interest rates

* If the Federal Reserve already bailed out the government by doing QE and buying all these bonds, why are they going to change course?

* I don't believe for a second Janet Yellen's tough talk about how independent the Federal Reserve is and how if the situation warranted it, they would raise interest rates and Congress would have to deal with the consequences



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