Despite what we've all been repeatedly told, Federal Reserve policy has nothing to do with stimulating jobs or increasing or decreasing inflation. Not at all.
In reality the Fed is little more than of bunch of incompetent sunshine makers. And their motto is an old one, Make hay while the sun shines because it won't last.
After what is now nearly six years of ZIRP, the Fed is about out of rays and their sweaty palms are beginning to show. The recent less-than-10 percent market correction brought the verbal interventionists out quicker than you can spell, well, interventionists.
A pure act of fear, it was.
After blowing $4 trillion on what is essentially an external paint job, the old pathetic structure remains unchanged. In real estate it's called curb appeal. What you need to know is these masters of monetary curb appeal are more dangerous to your economic health than the Ebola virus federal officials are so confused about.
No less a monetary curb appeal specialist than retired Fed chairman Sir Alan Greenspan yesterday admitted as much.
Inflation is “dead in the water” because effective demand is “dead in the water,” he said.
But quantitative easing has been a “terrific success” in getting the real rate of return on long-term assets down, boosting all income-earning assets.
“It hasn’t been a success in the demand side,” he said, because banks are simply parking the reserves at the central bank.
“They just let it sit. Unless or until that happens, you don’t galvanize economic activity,” he said.
“When that starts, all things can happen - and not all of them are good,” he said.
Greenspan said monetary policy is in uncharted territory. He said he was worried the “real pressure” will come when the markets demand higher rates from the Fed to keep reserve balances where they are, he said.
The former Fed chairman said he still has doubts about the viability of the euro. He said that without full political integration in Europe, the euro zone would break up.
There is so much economic gobbledygook in these Greenspan statements that it's defies all common sense. Here are just a few.
Sure, Mr. Greenspan, it boosted "all income-earning assets," but killed the income stream from those assets. You know, Mr. Greenspan, the ones the infirm, the old and the fixed-income crowd live off.
Yet one of your Fed successors wants us to believe she's mightily concerned about income inequality, an inequality she and her band of house painters helped create.
Your compatriots at the ECB and its Keynesian-steeped backers are screaming for more American style QE. In short, they wish to emulate a program which you just acknowledged up to now has failed to do what it was touted to do, loosen the lending purse strings of bankers. And that's after nearly six years and $4 trillion has been toss its way.
Greenspan is well-known for his "irrational exuberance" statement, a phrase reportedly he lifted from Yale economist Robert Shiller.
Now that he's expressed his concern about "the viability of the euro," we're sure his European friends are duly thrilled also.
According to history, Adolph Hitler was a retired house painter. One wonders how long it will be before the public demands the retirement of another group of house painters?
There is so much economic gobbledygook in these Greenspan statements that it's defies all common sense. Here are just a few.
Sure, Mr. Greenspan, it boosted "all income-earning assets," but killed the income stream from those assets. You know, Mr. Greenspan, the ones the infirm, the old and the fixed-income crowd live off.
Yet one of your Fed successors wants us to believe she's mightily concerned about income inequality, an inequality she and her band of house painters helped create.
Your compatriots at the ECB and its Keynesian-steeped backers are screaming for more American style QE. In short, they wish to emulate a program which you just acknowledged up to now has failed to do what it was touted to do, loosen the lending purse strings of bankers. And that's after nearly six years and $4 trillion has been toss its way.
Greenspan is well-known for his "irrational exuberance" statement, a phrase reportedly he lifted from Yale economist Robert Shiller.
Now that he's expressed his concern about "the viability of the euro," we're sure his European friends are duly thrilled also.
According to history, Adolph Hitler was a retired house painter. One wonders how long it will be before the public demands the retirement of another group of house painters?
No comments:
Post a Comment