Dammit Janet, Raise the Roof Baby
At his missive The Fed Will Not Raise Rates Heres Why, Nick Cheer commented "Many people do not understand that we are in a long term deflationary cycle.... We see currently that the inflationary data is running far below 2% target"
The Nattering One muses... Do not drink the kool aid of the media narrative and the econometric falsity of the CPI/PCE. I tire of this "my computer is cheaper, so my life is better" CPI deflationary bullshit. Inflation is anything but tame, ask anyone who actually pays the bills and shops for everyday necessities. And don't think for a moment that the Fed does not know the true rate of inflation and yet they manage to keep your expectations firmly anchored with their false 2% target and statements.
Know this time proven fact, Central bankers NEVER allow true deflation as that is their anti Christ. This is why there is ALWAYS inflation and much more than advertised, and always more debt, the bankers friends.
"I would say this is hardly an economic environment that necessitates a rise in interest rates."
Absolutely spot on, do not drink the kool aid of the robust economy falsity. What is left of our emasculated economy is a QEZIRP zombie and it should have been killed and burned so that a new one could be reborn from the ashes. But no, bailouts, ZIRP and QE ensured that there is "something in this more than natural".
"We are nowhere near a place where the Fed is able to raise rates without causing severe economic damage to the economy."
So where do they have you, exactly where they want you. One would think, never gonna raise, but how can they severely damage something that is quite dead?
The Fed's greatest fear right now? Not deflation, inflation or the economy... they may have lost control. As in without the Fed, banks and foreigners buying bonds, engaging in the carry and artificially suppressing interest rates, rates could rocket to the upside without the fed raising; and that they have lost their "open market" mojo or swagger.
IMO, Rates need to go up, squeezing the passive bond carry that feeds the secular stagnation of media narrative. While causing an exodus into capex and animal spirits, and bringing normalcy, as in true price discovery, back to the markets.
But my opine matters not and hopefully the Fed knows what my Fed chairman Salmo Trutta knows:
1) Unless money flows exceed the rate-of-change in real-output by 2-3 percentage points, output can't be sold, production will be cut back and jobs will be lost.
2) Money stocks (and aggregate demand) cannot be managed by any attempt to control the cost of credit (pegging rates).
As those money flows are getting thinner and thinner, raising will force the flows from under the mattress and back onto the poker table. And since raising cannot harm aggregate demand, especially with a zombie economy... Dammit Janet, raise, raise, raise the roof baby.
The Nattering One muses... Do not drink the kool aid of the media narrative and the econometric falsity of the CPI/PCE. I tire of this "my computer is cheaper, so my life is better" CPI deflationary bullshit. Inflation is anything but tame, ask anyone who actually pays the bills and shops for everyday necessities. And don't think for a moment that the Fed does not know the true rate of inflation and yet they manage to keep your expectations firmly anchored with their false 2% target and statements.
Know this time proven fact, Central bankers NEVER allow true deflation as that is their anti Christ. This is why there is ALWAYS inflation and much more than advertised, and always more debt, the bankers friends.
"I would say this is hardly an economic environment that necessitates a rise in interest rates."
Absolutely spot on, do not drink the kool aid of the robust economy falsity. What is left of our emasculated economy is a QEZIRP zombie and it should have been killed and burned so that a new one could be reborn from the ashes. But no, bailouts, ZIRP and QE ensured that there is "something in this more than natural".
"We are nowhere near a place where the Fed is able to raise rates without causing severe economic damage to the economy."
So where do they have you, exactly where they want you. One would think, never gonna raise, but how can they severely damage something that is quite dead?
The Fed's greatest fear right now? Not deflation, inflation or the economy... they may have lost control. As in without the Fed, banks and foreigners buying bonds, engaging in the carry and artificially suppressing interest rates, rates could rocket to the upside without the fed raising; and that they have lost their "open market" mojo or swagger.
IMO, Rates need to go up, squeezing the passive bond carry that feeds the secular stagnation of media narrative. While causing an exodus into capex and animal spirits, and bringing normalcy, as in true price discovery, back to the markets.
But my opine matters not and hopefully the Fed knows what my Fed chairman Salmo Trutta knows:
1) Unless money flows exceed the rate-of-change in real-output by 2-3 percentage points, output can't be sold, production will be cut back and jobs will be lost.
2) Money stocks (and aggregate demand) cannot be managed by any attempt to control the cost of credit (pegging rates).
As those money flows are getting thinner and thinner, raising will force the flows from under the mattress and back onto the poker table. And since raising cannot harm aggregate demand, especially with a zombie economy... Dammit Janet, raise, raise, raise the roof baby.
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