The Fed's Federal Open Market Committee renewed its commitment to easy money this week. The Fed will pretend to be committed to raising rates while doing nothing, and its ongoing war against deflation will continue to make us poorer.
The problem with the central bank's easy-money policies is not primarily that it leads to rising prices. The big problem is that it leads to the crippling of the wealth creation process and the movement of resources from productive to non-productive sectors.
The Fed has a difficult balancing act. To maintain the current easy-money induced boom, it must not raise rates. But at the same time, it must also act as if it might raise rates some day, or savers will abandon the credit markets.
The Pope is touring North America this week, promoting a variety of interventionist “solutions” to global warming, poverty, and more. But a far more powerful religious figure, Janet Yellen, continues to pull the levers of the global financial system.
Jeff Deist and Bill Bonner consider various ugly endgames for the US dollar.
There’s much debate over how the Fed determines interest rates. Many pundits seem to assume that central banks dictate interest rates to the market. In fact, central banks mostly affect interest rates indirectly through their power to change the money supply.
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?
