The Fed Is The Ugly Truth

Rembrandt van Rijn Man with a falcon on his wrist (possibly St. Bavo) 1661

This Fed thing just keeps going on, and it needs to stop. There is nothing in the discussion about the Federal Reserve these days that has any value other than it provides even more proof that the Fed has killed off the most essential elements of what once made the US economy function. All markets, stocks, bonds, housing markets, all price discovery, all murdered. No heartbeat. Pining for the fjords.

And instead of addressing that, and I’m not even talking about addressing fixing what is wrong, all I see is neverending stuff about Jay Powell using, or not using, terms such as “patient” or “accommodative”. Like any of it means anything coming from him and his ilk. Other than for making ‘investors’ a quick buck. Like a quick buck could ever trump the survival of entire market systems.

People discussing whether Jay Powell is doing a good job all miss the point. Because Powell should not be doing that job in the first place. The Fed should not have the power to manipulate the US economy anywhere near as much as it does. Because that power is perverting America like nothing else, and the US economy will never recover as long as the Fed holds that power. Is that clear enough? Do we understand that at least?

Powell apparently changed his tune Friday in order to let the mirage that the stock market has become, live another day. Almost literally a day, since it will come crumbling down no matter what he does, just a day or so later. It’s all some message hidden in his use of “patience” or “accommodative”. Nothing he does will have any effect in the medium or longer term, and he knows it.

The entire US economy today is about the quick buck. It’s about tomorrow morning only because nobody has the guts to look at 10 years from now. That makes Jay Powell and his whole Federistas staff worse than useless. It makes no difference if perhaps jobs are doing well; the pre-Powell Fed launched a bubble and that bubble will burst one day, a whole series of them will.

The only good thing he can do is get out of the way and let the markets be the markets, to let them discover prices by letting people interact with people. But who exactly in the US has the power to make the Fed go away?

If you were one of the people who thought Jerome Powell was different from the rest of the Fed head honchos, the ones who preceded him, and I’m by no means just talking Greenspan, Bernanke, and Yellen, you can now consider yourself corrected.

Powell is not going to keep hiking rates if a bunch of zombie markets keep falling like they did in December 2018, even though that’s just what we should want zombies to do, and even if hiking is the only way to resurrect a degree of normality and functionality into the markets.

1 2 3 4
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.