Having put up a post on Janet Yellen, the Vice Chair of the Federal Reserve in the US, I now find in today’s AFR that she’s hot favourite to become the next Chairman when Bernanke leaves. I, of course, expect nothing less from Obama. He has a knack for those kinds of things, but even so.

And while the article was naturally all about what a great choice her appointment would be, there were two very interesting side notes to give a bit of balance and perhaps some reason for second thoughts. First there was this:

Her record is not without fault. Yellen ran the San Francisco Fed – when it was right in the eye of the sub-prime storm – from 2004 to 2010, before Barack Obama promoted her to her current role as vice-chairman.

Two huge mortgage lenders – Countrywide and WAMU – collapsed under her watch.

Wow, she was the one responsible for overseeing Countrywide! Obviously just the person to run the entire show. And then there is a discussion of the other candidate for the Fed chair whose views seem to coincide with my own. From the article:

Yellen dismissed the views of dissidents such as Richard Fisher of the Federal Reserve Bank of Dallas who say [current] policies incite risky investing, distort markets and store up trouble for the future. . . .

Fisher is an emphatic opponent of QE and ultra-low rates. He argues they distort financial markets, defy an orderly exit and could fuel inflation.

This is the view of “dissidents”? It is surely the plainest common sense. The real worry is that central banks are now run by people who cannot understand what incredible risks are being run and just how badly it could all turn out.