"WASHINGTON – Federal Reserve governor Frederic Mishkin plans to step down at the end of August and return to academia, people familiar with the matter said, leaving the Fed further short-handed as it deals with the credit crisis, possible recession and sweeping changes to financial regulation."

Uh huh.

Let me translate this for you:

I came in here with my ivory-tower view of the world arrogant beyond words, believing that we could simply dictate what monetary policy would be and the world would bend to our will. We could throw around our $800 billion balance sheet without consequence beyond what we intended.

What I discovered is that the real world gives the finger to academics, and it really pisses me off. Why, we took $250 billion and threw it at the markets so The Fed wouldn't have to admit that it had been a total asshat for the last ten years, intentionally blowing bubbles in anything we could find and ruining the balance sheets of American Households while allowing our best buddies to make billions in ill-gotten salaries and bonuses.

But in response, instead of making more crappy loans with that money those traitors instantly plowed it into the only thing with stable value left in the world (since we intentionally debased everything else) - OIL! Those bastards! How DARE THEY defy the ever-powerful Ivory Tower Fed!

Now, recognizing that "the gig is up" and the American People are getting close to the point where they just might pick up pitchforks and torches (not to mention those other nations where the pitchforks have already come out - starving people will do things like that), I've decided to go barricade myself back at Columbia University, where I can deadbolt myself in the Ivory Tower and hide behind the "Piled Higher and Deeper" after my name (oh, and my tenure.) This way when the consequences of my idiocy become apparent to those foolish Americans who let me out of my cage in the first place, including the speech I gave in Jackson Hole in which I basically advocated throwing any pretense of caring about price inflation to the wind, I can point my finger at Bernanke and say "see, it was all HIS fault - ha ha ha!"

Yeah.

Good riddance Mishkin. You go back to teaching at Columbia, where you can give "A"s to "students" who parrot your nonsense (not to mention dangerous) economic theories. Never mind that you had a two year leave of absence, those are routinely extended, and your appointment was for fourteen years.

A rat scampering off the ship as it slowly settles into the depths of the sea? Hmmm.... Oh Mr. Smith, er, Bernanke? Have you locked yourself in the wheelhouse yet?

Oh, and look what The Cat dragged in last night? The following speech by Dallas Fed President Richard Fisher:

"I am also not going to engage in a discussion of present monetary policy tonight, except to say that if inflationary developments and, more important, inflation expectations, continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario. Inflation is the most insidious enemy of capitalism. No central banker can countenance it, not least the men and women of the Federal Reserve.

Tonight, I want to talk about a different matter. In keeping with Bill Martin’s advice, I have been scanning the horizon for danger signals even as we continue working to recover from the recent turmoil. In the distance, I see a frightful storm brewing in the form of untethered government debt. I choose the words—“frightful storm”—deliberately to avoid hyperbole. Unless we take steps to deal with it, the long-term fiscal situation of the federal government will be unimaginably more devastating to our economic prosperity than the subprime debacle and the recent debauching of credit markets that we are now working so hard to correct."

Really Richard?

Readers really ought to click that link up above and read the entire treatise. Its good, and lays on the table, without BS or games, exactly what America faces if we don't cut the crap out with entitlement spending - and deficits in general.

To be blunt, he points out that we could cut all discretionary spending (including the military), increase tax revenues (not rates, revenues!) by nearly 70%, or cut benefits by a net aggregate of nearly $100 trillion dollars.

That's right, we're in the hole as Americans to the tune of one hundred trillion dollars.

But see, Richard Fisher also talks about how "we (the Fed) are working so hard to correct" the recent debauching of the credit markets in that speech, and I'm going to focus there first.

Either Mr. Fisher suddenly had a "come to Jesus" moment, in which case this Ticker is an open, public challenge to him to prove it, or he's lying.

I intend to find out which is the case.

See, Mr.