Friday, October 30, 2015

Fussing Over the Fed

I'm not going to make much of one over this:

"Plunging crude oil prices and a stronger dollar are helping consumers, making gas and imported goods cheaper, but they are hurting energy companies and US manufacturers, whose goods have become more expensive overseas. These industries have cut thousands of jobs over the past few months."

That is not what I've been told. We have been told here that the job market has been great because of those industries.

Rather ominous way to begin, isn't it, what with the mixed me$$ages and everything?

"Seeing signs of a slowing economy, investors are increasingly discounting the chances of a December rate increase, in part because of a widespread perception that the Fed continues to be too optimistic in its outlook. Several crucial economic reports in the coming weeks could determine relatively quickly whether December remains a plausible option. The government is scheduled to release an initial estimate of third-quarter growth on Thursday, followed next week by an even more important indicator, the estimate of October job growth."

So some more government lies can be put forth, fully promulgated by the propaganda pre$$, then the numbers can be revised down later after the rate hike. Amazing what you can do when you live in a bubble of $elf-ju$tification.

"What will the Fed do on interest rates?; It’s anybody’s guess for now, say investment professionals" by Beth Healy Globe Staff  October 23, 2015

Dan Fuss, the famous Boston bond manager, said Thursday that he has no idea [on how] “to deal with the headache our central bank has right now.”

Awww, the poor central bank (wretch)!

Central bankers are charged with maintaining a delicate balance. If the Fed holds rates too low for too long, it risks sparking inflation and creating bubbles. If it raises them too high, too quickly, it could push the economy into recession.

Inflation has been running below the Fed’s target of 2 percent, and central bankers have indicated that they want to see it climb nearer that level before raising rates. Rick Rieder, chief investment officer for bonds at BlackRock Inc. in New York., however, called 2 percent “ridiculous.” A more realistic target is 1-to-1.5 percent, he said, in part because new technologies help the economy grow without adding costs.

Fuss said he worries about some things at least as much as the Fed, like disorder in Congress. The threat of the Republican-controlled Congress failing to raise the nation’s debt limit and technically defaulting is “clearly hurting our credibility” overseas, Fuss said.

Won't be able to blame that now.

He singled out peace as the single best thing that could happen for markets.

Woa, woa, woa, WHAT?!!??

With conflicts raging in the Middle East and “an underlying trend that involves the military,’’ he said, “that, just point-blank, is not good.”

He said international matters — good and bad — preoccupy the central bank more than in the past.

One reason being because the world is moving away from the petrodollar.

That came into focus in September, when the Fed delayed raising rates in part due to turmoil in global financial markets, spurred by concerns of slower growth in China.

This eye on foreign affairs is contributing to the Fed’s indecision, Fuss suggested. Although the Fed’s mission is help the economy while keeping a lid on inflation, the central bank is now figuring the impact of international conditions into the equation....

Yeah, right, the wars the government initiated at behest of the bankers (and Israel) IS the problem.


And in their defense:

"America’s innate fear of the Fed" by Roger Lowenstein   October 21, 2015

.... Since Thomas Jefferson’s time, Americans have distrusted central power. That distrust has spawned a sorry legacy — an obsessive and excessive fear of central authority manifest from the beginning, when the new Republic was hidebound by the Articles of Confederation.

Yeah, well, sorry if you think we will be trusting this bank and its enforcer government ever again. That ship has $ailed!

And no sooner was the Constitution launched than minirebellions against federalism blossomed. Alexis de Tocqueville, who famously visited America in the 1830s, could not believe the vitriol that Americans felt for the (modest) central government. Americans, he wrote, were “preoccupied by one great fear,” the fear of “centralization.”

Rightly so. Anthropologists will tell you societies declined when bureaucracy increased, and what is central authorities solution to the problem? Another layer of bureaucracy.

The byproduct of this Jeffersonian legacy has been a misbegotten faith in “originalism,” the peculiarly American belief that anything that didn’t exist in 1776 shouldn’t be created or legislated now. Reforms that in other nations are accepted as a matter of course (i.e., national health care) are controversial here.

Whereas other nations accept that conditions change, societies evolve, and therefore so must civic responses to them, Americans cling to a myth of Edenic purity.

We are living in a world full of them, from WMD to 9/11 to all history.

Thus, constitutional scholars debate the meaning of a comma in the Second Amendment, oblivious to the homicidal power of modern weaponry.

No, that was a well-reasoned amendment meant to arm the people against tyrannical government and it is just as relevant today. More so, in fact.

Then, too, foes of a central bank yearn for a second coming of the gold standard, gold having cast a religious spell on the ancients.

Now we get into it, and I don't. Americans would be destitute if we went back to the gold standard. Who do you think owns and controls all of that anyway? Same guys running the printing presses.

Alas, a monetary system based on mineral extraction is wholly insufficient for the vigorous and complex commerce of the 21st century.

We agree (except now it is oil that undergirds it)!

Even in the early decades of the 20th century, allegiance to the gold standard provoked or accentuated severe depressions in both Britain and the United States.

No, that is when the private central bank was established. That's what caused those.

The most visible current manifestation of anticentralism is the populist outcry against government in the banking system. This, too, has Jeffersonian roots; the sage of Monticello famously mistrusted bankers.

A true giant in the pantheon of history then. Of course, it was those families they were escaping from by coming here and fighting for independence. They don't teach you that in school.

In Europe, as nations industrialized in the 18th and 19th centuries, each, in turn, adopted central banking to shore up its finances, smooth the vicissitudes of the credit cycle, and provide a lender of last resort. America, by contrast, abolished not one but two national banks early in its history.

Europe was taken over by the Rothschild clan much sooner. That's all that means.

Until the Civil War, the American economy was a disunited polyglot, with hundreds of private banks minting notes, each of which was purportedly a “currency.” Even into the 20th century, the United States remained the only advanced nation without a central bank. Since no central reserve of credit existed, each bank kept its own reserve. In times of stress, each bank tightened — accentuating the general distress and frequently leading to a financial panic.

Reformist bankers argued that this antiquated and disjointed system was holding back the country’s development, and that the United States needed a central bank. But the idea was hugely unpopular.

Still is.

As Jacob Schiff, a Wall Street mogul, remonstrated to reformers, “If you go away from New York City and discuss this subject of a central bank, you will find grave distrust in the proposition.” Schiff, who had emigrated from Germany after the Civil War, declared to the New York Chamber of Commerce in 1906 that the American people “at the time of Andrew Jackson, and more so today, do not want to centralize power.”

Doe$n't that tell you something?

After yet another terrible financial panic and then a painstaking legislative process, in 1913 Congress enacted the Federal Reserve.

One of the darkest days in the history of this nation.

But antipathy to centralism lives on, particularly in areas remote from the Northeast.

And the Northeast. From where do you think I'm writing?

Bizarrely, populists today are angry not because the Fed failed to save the financial system in 2008 but, rather, because it forcefully intervened and did save it.

He loved the bailouts!

Candidates for high office are popular merely because they are not from “Washington.” The political labels are reversed (in 1900, Democrats were the party of laissez-faire; today, Tea Party Republicans are).

How interesting, except they are both the captives of bankers now.

But obsessive anticentralism is just as toxic. Americans would do better to mimic an alternative legacy of the Founding Fathers — faith in a robust federal government, properly tempered by constitutional checks.

Which we no longer have, Congre$$ abdicated.

Roger Lowenstein is the author of “America’s Bank: The Epic Struggle To Create the Federal Reserve.’’

An epic struggle the bankers were able to achieve and which has lasted over 100 years -- and look at the shape this nation is in.


Related: All Hail Our New Lord and Master, the Stock Market

Umm, readers, I've kind of hit an epiphany with this apologetic slop so I'm going to  withdraw early today and ponder my next move.

Related: Friday Fire Drill

Looks like I'm going to have to rethink my strategy from now on. This whole blog may damn well be turned upside down!