In spite of past assurances to the contrary, our central planners at the Federal Reserve emerged this week to announce that their zero-interest-rate policy will continue. Is the world coming to realize that the emperors have no clothes?
Perhaps no economic pronouncement in history has been anticipated, discussed, predicted, dissected, and reported like the Federal Reserve’s momento
Whether it’s the aftermath of the Greek crisis or the ongoing migrant and refugee crisis, the nation-states of Europe, and the EU government, have plenty to worry about. Meanwhile, the world braces for next week's Fed meeting.
The Fed is talking about raising interest rates, but it knows that any move in that direction is likely to cause a recession and more economic pain. But it also knows it can't keep forcing down interest rates forever.
Recorded at the Mises Institute in Auburn, Alabama, on 23 July 2015.
The Fed often uses the "natural rate" of unemployment to determine whether or not it should raise interest rates. But as with so many metrics the Fed uses, this one is based on arbitrary measures that can be manipulated to suit Fed policy.
