MCViewPoint

Opinion from a Libertarian ViewPoint

Old Yellen – No New Tricks For This Old Dog

Posted by Martin C. Fox on March 25, 2015

It is sad when the fate of the Wall Street rests on whether the Fed Chair uses a particular word in her periodic smoke and mirrors speech.

“Just because I don’t use the word patience doesn’t mean I am impatient.”

In other words “I don’t have anything new to say so I will obfuscate and say the same old thing.”

Yellen knows the employment and inflation numbers are fake. Things are getting worse. She can’t raise rates because no more free money would put Wall Street in reverse. The only tool left in the “tool box” left by Bernanke is printing money.

In other words “Counterfeiting hasn’t worked for six years but I will keep using it because the only other option is…reality.”

According to this part of the problem is that much of this new digital and paper money isn’t going anywhere. Banks are keeping it to, in part get their liquidity up. It helps with the government’s stress test and explains the relatively mild inflation rate. The more interest rates go up the more banks will shift money to the treasury. The treasury has to pay interest to the bank.

The treasury can only pay with more counterfeit moolah.

Rock and hard place.

Be seeing you

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