By Adam Levin
Even the farsighted Founding Fathers could not have foreseen this – the Fed is now on Twitter! Just think of the possibilities– one fine Friday any Fed functionary could foment a world crisis in 140 characters or less! It could be as simple as a typo.
For example, the Fed’s second tweet was: ”Watch a video of Chairman #Bernanke explaining the structure of the Federal Reserve. #fed #economy”
What if it accidentally read: “Watch a video of Chairman #Bernanke exploding the structure of the Federal Reserve. #fed #economy”
Or even worse, what if a disgruntled Fed employee tweeted: “New Fed figures fuel inflation fears–discount rate will be set at 11% next week”
Get the idea?
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Perhaps it’s a laudable thing that the Fed wants to move into the 21st century by means of instant communication through Twitter. But I wonder – does anyone really need a “cool Fed” or a “fab Fed?” Remember the famous “briefcase theory” during the tenure of Alan Greenspan? That theory held that if Greenspan left his house (on a day when the Open Market Committee was meeting) with a bulging briefcase, it was because the Chairman had armed himself with a battery of statistical reports and planned to argue a rate change. However, a slimmer briefcase indicated that the FOMC would leave rates alone (this was, of course, in pre-iPad times.) If people actually resorted to measuring the thickness of a briefcase for a sign of policy change, how long would it be before almost anything that was tweeted acquired major significance? After all, just a couple weeks ago the price of gold dropped by a whopping four percent, evidently because Chairman Benrnanke made a comment about improving employment conditions. So, in a world where the images of the Virgin Mary regularly appear on tuna melts, it’s a safe bet that someone somewhere will find Nostradamus-like predictions cleverly hidden in the verbiage of an otherwise banal tweet.