And that brings us to the Fed and it's current strategy when one doesn't have a clue any longer. Will they hike interest rates this year or won't they? And if so, how many times and when does it all start?
One time when it doesn't for sure start is just before what could be one of the most volatile, contentious presidential elections in the nation's history.
Just look at the market's reactions to the recent Bank of Japan's do nothing stance at it last meeting, it wasn't what those central bankers hoped for. And the same can be said for the ECB. Factor in this little riddle, too: The Fed's abrupt on-again-off-again recent concern about the global economy. We all know that the Yellen-led Fed claims to be data driven. But when that data are not driven in the direction you want or hoped for, what do you do then? Obfuscate.
The lesson here for investors and all those linear-thinking central bankers is not all markets are groupies. Recall too in the last few months how many Fed emissaries have been sent forward to give conflicting are-they-or-aren't-they messages about interest rates in the media. The shelves in the Global Monetary Policy store are empty. What's left is what's going on now.
When you can't find any inflation because your inflation-doctored data is now returning to bite you in the butt, when you no longer have a clue, confuse and obfuscate, and with a little luck somehow the problem just might disappear. But then as economists are so fond of saying: On the other hand.....!
As for that old girlfriend, that strategy didn't work. But a court ordered eviction notice did. And that's why in the future, the Fed, if there is one, ought to be held responsible for its actions. Around the globe these bureaucrats hold in their tiny linear and often pathetic econometric-laden minds the financial future of too many lives for a group of non-elected bureaucrats to escape responsibility.
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