Opinion from a Libertarian ViewPoint

WSJ Loves Its Fed Enabler – Readers Don’t

Posted by Martin C. Fox on September 26, 2015

These are 25 Sep 15 comments from Wall Street Journal readers after Yellen says she will raise rates ‘later this year’.

Hopefully these same readers will realize the WSJ part of the problem.

Be seeing you

After 7-8 days down, this seems to be just a bounce….

How ridiculous. We can’t raise rates now but can in 3 months? What is going to be different then?

And look at this trollish hack of a human being. She doesn’t even possess enough physical strength to stand up and talk for an hour, but she’s strong enough to lead the Fed? Why on earth do we give power to such weak bureaucratic hacks? Our government is littered with such women now, little fireplugs of nothingness, flabby, sagging, flaccid and weak. Yet they have so much power.

What happened to my nation? I don’t recognize this country anymore. 9 years of decreasing rates, 7 years of ZIRP – if anyone ever told you in before 2008 that this was “good” policy, you would have been laughed out of the room. But now I’m supposed to clap like a seal and declare victory with the basketcase of an economy we now have? If they manage to raise rates by .25 I’m supposed to get in line and say Keynesian economics work?

Our society is now Orwellian. We are doomed. 

Just make a decision. Zero leadership or backbone.

Lol. Don’t you understand? They can’t raise rates – not significantly. She may be able to get away with something symbolic like .25 but that’s it. The entire illusion of “growth” that is being peddled is premised on ridiculously cheap money – in other words, a bubble. We are in our last bubble, fyi. There is no more monetary gas to throw on the dying embers of our once amazing economy. It’s not just monetary policy either, it’s also about trade. I’m a free market person to my bones but when it comes to international trade it seems that every right-winger (I’m one too) forget the rest of economics. Sure, (I’m one too) forget the rest of economics. Sure, exchanges are what create wealth – but there is much more to it than that. I’m going to lecture here, but all your free trade zealots need a lecture and I’m in the mood this morning, so here goes. The basic premise behind free trade is the same which governs all economic transactions. Exchanges create wealth due to comparative advantage and specialization of either or both parties in an exchange. The guy who makes wheelbarrows trades with the guy who grows apples and they both end up with more apples and wheelbarrows than if they tried to do both themselves – this is how wealth is created. But it’s also true that there are exchanges that don’t create net value because the “advantage” of one party or the other isn’t based on actual superior productivity. So even as you might see price/cost declines, when you look at net wealth production, exchanges can and do sometimes lead to decreases in net wealth. Rather, they look like wealth shifting from one party to another. In fact, the gains of trade – domestic or international – are rarely evenly distributed. Even more to the point? The wealth creation comes from free market forces in the first place. The comparative advantage/specialization arises in free markets and compounds. When trading with a nation like China, the party you are dealing with hasn’t risen to the fore as a party you’d want to trade with by being the most productive producer, he’s done so due solely to politics and cronyism. We are in no way getting an efficient producer of anything when we trade with China, all we are getting is a very low cost of labor and many capital production inputs. But free marketers snicker at guys like me who note that we’ve lost 58,000 factories in the U.S. since 2000 when we begged and cheerleaded China into the WTO. Today China sneers at us and its govt overtly sacks U.S. companies doing business in China, stealing our IP without shame. So it isn’t just rates. The fact is that we are on life support as a producing nation. We have scraped out a huge part of our industrial base to keep the illusion going a little longer. What is that illusion? Well in the first case, it’s that central bank inflationary policies are a cause of “growth” in the economy. This is major premise the Fed has been flacking for and then and then covering for since it’s formation. Only with vastly cheaper production could the American people be conned into believing that they weren’t witnessing our economic collapse. They think a 15 dollar pair of decent blue jeans is a symptom that we are doing well when in fact what should have happened is that the dollar became so valuable due our productivity that all good became cheaper. Consider this simple example. Why are rising housing prices good? Wouldn’t it be better if houses got cheaper and better all the time like say a PC? Now real estate is finite, but in fact one can build apt buildings instead of houses so that’s not really true either. The only reason that it’s good that housing prices goes up is for people who want to borrow against those assets. People and institutions. Debt. The entire game is standing on debt stilts. Govts worldwide have 60 trillion of it – up 3x in 15 years. As debt-based Ponzi scheme going. That’s why we went to ZIRP – the only way we could keep it going anymore is if we made money free. The returns required to make such bets pay off are much lower. So you have to look at monetary policy as a piece of the larger policy environment to understand what’s really going on. Politicians are desperate to perpetuate the myth that their policies – read as “central planning” – are what drives growth in the U.S. economy. It’s the basic conceit of all economic central planners, Hayek called it The Fatal Conceit. This is why we are operating below capacity. This is why our productivity growth is anemic or in fact no there at all. This is why people are dropping out of the labor force. This is why we trade with monsters like the ChiComms, our enemies and vicious, totalitarian supremacists, racists and madmen. I didn’t mean to single you out, I’m putting this here for everyone. Have a great day. 

This article doesn’t say a word about the coughing spell Yellen had near the end of her speech.

According to the Morning Squawk alert (CNBC) in my email in-box, Ms. Yellen had a coughing spell that required medical attention near the end of her speech. Central Bank officials say she is fine.

My first thought after reading that alert was that this speech was a lot for Ms. Yellen to cough up! But, it did settle rising fear in the global markets.

So, just how much of Mama Fed’s speech can be taken at face value, and how much was purposely skewed interpretation of data intended precisely to settle fears in world markets’ children?  Who got to Mama Fed?

Far too much power is in the hands of unelected bureaucrats in DC, when world markets react to every utterance of a central planning committee and its chair…

Safe havens: Gold, JPY and CHF are falling – Yellen calmed down the markets, apettite for riskier assets may be stronger now.

Not reported here is the fact that Yellen was stumbling and appeared to almost pass out at the end of her remarks. Hope she is ok.

The dollar is strong for one reason:  Nearly every other currency has been debased at a far greater rate than the US dollar.  The dollar is strong only relative to other currencies, not for any intrinsic value.

Yellen is doing a miserable job as head of the FED.

Yellen caved in to the Obama admin and passed on the Sept rate increase. Bad move.

…so much for FED independence.

She’s a soft-money Keynesian, just like the last two…

Not sure why the Chair said what she did.

Possibly she did so to try to “psyche” the Market out from making too many assumptions and from the Market driving itself higher for negative reasons.

There is NO way the economy can support a rate increase.

Or this mumbling mediocrity could have just raised rates in September and avoided all the market dislocations………

I’m more nervous now.  The Fed governor doesn’t have the sense to stay hydrated?

in other headlines:

Brazil braces for more pain as unemployment surges and the central bank forecasts a far deeper recession

Emerging markets go from bad to worse

Businesses curb spending on durable goods

Eurozone economy slows in September

Bank of England warns financial risks have intensified

meanwhile on planet Obama:

suggest “Improve Gender Equality to Boost Global Growth by Trillions”

China & US announce steps to fight climate change, which only US will honor

the fight against ISIS is going very well

unemployment is at record lows

the economy has fully recovered

Janet should step down as she does not seem to have the type of personality that can make decisions.  She allowed a controversy over a small rate change  to become a media event and the resulting pressure it placed on herself has effected her health.  Further her firmly held belief that interest rates act directly like a valve on inflation, unemployment and growth  must be coming into question in her mind. If things were only so simple.  She must have thought that the markets would react in a positive manner with the delay of interest rates and received a shock when they did not.  She was blind sided because she under estimated the effects of her previous comments.

She appears outmatched in this role. Bullard far more credible and has gravitas to match the job.

Usually, rate cuts pre-date recessions by about a quarter and recessions don’t end until a month or two after the rate cut ceases. Markets may like rate cuts, in the short run, but low rates are harmful to an economy.

Yes, there’s nothing more inspiring than a rambling 40-page lecture with multiple footnotes and charts ending with being escorted off the stage because of “dehydration”.  Heck, she makes the Pope look downright pathetic.  (Or is it global “investors” who are pathetic?)

“It is hard to make predictions especially about the future”-Yogi Berra. They will raise rates and they will see what happens. They can change their minds as other countries have been forced to do since the crash. Or maybe it really is time for the Fed to return to the way things were.

Messages in the sheep entrails are unclear, time to flip a coin….

Alternate headline, “Central Planning Committee decides later would be a good time to take the bitter medicine”.

Shoot Obama or some member of the US Congress…. meh.

Shoot Yellen, USA will go into recession.  The power to print money, the ultimate power, is in the hands of un-elected Yellen. And Christian Americans seem to be ok with it.

Why are we paying Congress and Obama then? USA is run by a Politburo… er, … the FED. Yellen is the true ruler of USA. Long live the Queen.

This is a very, very, very dangerous environment.

Look back at FED history: every time there has been a new Fed chairman taking the helm, a financial crisis occurs shortly thereafter……

The only difference this time will be the severity of such crisis. Advice- ignore the Wall Street hacks cheerleading this thing- these are the same idiots who were dead wrong before…..

Protect yourself and your family…..

And the alternative is… to raise the cost of borrowing money? why? If you don’t want to ‘feed the machine’, if you will, then don’t borrow any money. Or would it be better to return our economy tied the ‘perceived value’ of some puny yellow rock? What joy that decision would bring when every one stopped working or growing food, bcs there ain’t enough puny little yellow rocks.

The alternative is interest rates set by market forces, i.e. capitalism, i.e..freedom and prosperity.

The entire planet soars because a corrupt and incompetent U.S. entity with no Constitutional authority to exist says they will continue to suppress the perceived market value of their phony fiat notes.

The entire planet is a collection of fools with no clue how close to the edge of the Abyss they are as they dance, stumble, and careen in their intoxicated stupor.

FED is still on-track?  To do what , nothing!

They are just blowing in the wind, buffeted by the daily news.

Why on earth would anyone think the Fed knows more than anyone else knows. If anything the opposite is true.

World’s best paid job for doing nothing? 🙂

The up and down of the market indexes ebbs and flows with each speech and comment that is made from the various Fed members. It tells me that the Fed has no clue what is going on and like politicians are yielding to the whims that they sense coming from market manipulators who unlike years past are bent on moving the market up and down. Where is the free market when you need it?



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