Use to be an old saying: Cooking with gas. Not only is gas abundant today, it's a clean burner. So when in doubt or you need to obfuscate, try a little stealth. If you like the prospect of modest economic growth over the next few years, you'll like Pimco Chief Bill Gross' characterization new-neutral.
Back in 2009 Gross concocted the term new normal, a period of low inflation or even deflation. Technology was killing jobs faster than a politician's speech on a warm summer evening puts people to sleep. The great immigration was on loosing more labor into the open market and the financial crisis canceled the retirement plans of a pack of baby boomers.
Too many workers, too few jobs. Consumers were tapped out but didn't know it yet. Like most in life they need to be told. And they finally were.
New neutral suggests the global economy is transitioning from the financial crisis recovery period to what could be called for want of a better term, just plain boring. In short, it foretells a low Fed lending rate. Low here means below what many consider normal. According to Gross, the Middle America transplant, it's around 2%.
Now that's an interesting proposition. What is considered normal in anything? We appreciate Gross and his fellow word smithers and their cuteness. But it's really dangerous to depend on a band of so-called bankers to determine or define anything let alone below normal. (See Mario Draghi and the ECB.)
One could ask how many of these people are in fact normal? And by whose definition?
The whole thing smells of an economic scam to keep the eyes of working folks off inflation and declining purchasing power. In some circles it's referred to as highway robbery by stealth.
After all, restive masses are not a good thing for markets, bankers, money runners or politicians.
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