Tag Archives: Janet Yellen

From James Howard Kunstler, at kuntsler.com:

The money-moving world waits on tenterhooks for the Wednesday appearance of America’s oracle, Janet Yellen, to step out of her grotto and state whether or not she feels twinges of patience. Wikipedia notes that Pythia, the original priestess of Delphi “…delivered oracles in a frenzied state induced by vapors rising from a chasm in the rock, and that she spoke gibberish which priests interpreted as the enigmatic prophecies preserved in Greek literature.” Some things never change.

Patience for what? Well, whether to raise the Federal Reserve’s benchmark short-term interest rate from near-zero to something microscopically above zero. This is what the world foolishly turns on. And, of course, also some oracular hint as to whether this momentous move might occur in April, June, September, or not at all.

Some canny observers of the vaudeville that US money policy has become — namely, Jim Rickards, David Stockman, Peter Schiff — maintain that Yellen and her Fed are boxed in and can really do nothing. Their policies and interventions regarding the flows of capital have done nothing so far but disable the normal operations of markets and distort the valuation of everything, especially the cost of renting money itself — for that is what happens when you take out a loan. The net result of all that is a financial picture that no longer reflects anything truthful about the actual economy, being a trade in goods and services.

The transparent truthlessness of the Fed’s basic premises go far to explain the chasm between official policy and reality — though it does not explain the appetite for plain lying of the supposedly informed minority cohort of the public, the deciders among us in business, politics, and media. For instance, the employment numbers that came out of the federal government ten days ago saying that the jobless rate is just over 5 percent. Everybody not in a special ed class in America knows that this is a barefaced lie. But nobody except a few mavericks on the web (see above) object to it. Lesser official oracles such as The New York Times and the Wall Street Journal report the lie without reservation and it gets absorbed into the body politic like any other morsel of protoplasm into the mindless amoeba that America has become.

So far, the Fed has tried to merely chatter about the possibility of raising rates as a substitute for actually doing anything. That’s because anything more than a gesture of raising rates will blow up the lucrative carry trade arbitrage enjoyed by the banks that hold the Fed (and everybody else) hostage, as well as the artificially inflated stock markets, and the US government’s ability to service its debt. That’s a lot to blow up. The wondrous levitating S & P index is the Fed’s substitute for reality. While the public’s attention is diverted to that ongoing marvel, they fail to see the appalling instability in currencies around the world, or the booby-traps laid in bond markets everywhere, or the devastation thundering through the oil industry, and the collapse of global trade relations that Tom Friedman said would last forever.

http://kunstler.com/clusterfuck-nation/american-amoeba/

To continue reading: American Amoeba

See also: Ms. Yellen Whispers Sweet Nothings In Mr. Market’s Ear, by Robert Gore, SLL, 12/19/14