The Observation Deck

So the Brexit vote itself wasn’t predicted. But with the vote, two things were entirely predictable. One was the accompanying drop in (U.S.) equity prices. Uncertainty does that. The second predictable outcome, more importantly, was the rapid, full recovery in those prices, to the point where we’ve hit all-time highs (again) in equities the last 2-3 days.

I watched stock futures tank the night of the vote and posted that they were throwing the baby out with the bathwater. So why was the U.S. stock price recovery easily predictable? Two reasons. One, sovereignty issues in Europe don’t matter much over here. And two, and this is critical so repeat after me….

THE FED WILL NOT LET STOCK PRICES FALL!!!! NO WAY, NO HOW, NOT EVER….

So over Brexit weekend late last month I put in a market order for 200 IXP on the Monday open that got filled at about 61. It’s been uphill from there, predictably. Nice to get a new position “on sale.” By the way, as stock go (which is pretty much nowhere from here) I like IXP. It invests in telecommunication companies, most of which are gonna make good money when G5 hits. Or at least I hope. At that point (2019 or so) I become a seller for sure. BTW I don’t own much stock, relatively. Haven’t for over ten years.

Now the during the last couple days, the central banks have fallen all over themselves to talk up “stimulus” and “accommodation.” Bernanke trekked all the way to Japan and jawboned it with Abe and the market gained another 2% that day. Huzzah! Mission accomplished! Even the head of the Cleveland Fed, like Bernanke a lifetime apparatchik from Princeton with no accomplishments to her name whatsoever, is quoted as saying “We’re always assessing tools that we could use. We’ve done quantitative easing and I think that’s proven to be useful. So it’s my view that (helicopter money) would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative.”

Huh? Quantitative easing (QE) has been effective? Tell that to anyone who doesn’t own a lot of stocks. The economy sucks. Salaries are flat at best. And despite what we’re being told, price inflation is rampant. Unless you measure inflation entirely in flat-screen TVs and not so much in health care or housing. Or tell retirees earning 0% on their life savings how great QE and interest manipulation (ZIRP) have been for them.

But that’s where “helicopter money” comes in. “Helicoptor money” is newly-created money (credit, really) directed right at consumers. No bank, corporate or government middlemen to reap the spoils first as with quantitative easing or interest rate suppression. Remember about a decade ago when the government sent every family a check? I got $1,200 I think. My brother only got $600 and boy was he pissed! That’s helicopter money. Told him he shoulda had TWO kids like I did, dumbshit.

But at its core, helicopter money is no different than QE. It still “money” (ha!) from thin air created by the Treasury and financed by the Fed, and it still adds to the Fed balance sheet. And it is still expected that it be repaid from excess economic activity, presumably by our children and grandchildren. But that is laughable. The magnitude of the debt is far greater than can ever be repaid. We can’t pay a tenth of what we owe, at least not honesty with equivalent money.

I’m actually in awe of what the Fed accomplished. QE was like the proverbial neutron bomb (the bomb that kills people and leaves all the other stuff perfectly intact). In a crappy economy, QE only lift stock prices without causing demand-based inflation in labor costs and most goods. I wish I had predicted it in 2008 but I didn’t. And I don’t think even helicopter money will cause classic price inflation at first because the economy is so darn bad. It won’t even help stock prices much, though it will keep them from falling.

But all the central bank monkeyshines, and helicopter money in particular if they go with it, will someday cause severe inflation, possibly even hyperinflation. It may take many years but how can it not? You can’t possibly create trillions and trillions of dollars in counterfeit “money” without people someday catching on. And make no mistake. Money created by the Fed is just as counterfeit as money created in my basement. Sooner or later, people will be eager to exchange their money for things. Not so much because they want the things, but because they don’t want the money. To date, money has been exchanged for stocks to the point where stocks, even in a crappy economy, are at record highs. But helicopter money starts to change that equation. So far, and I don’t know whether it’s just ignorance, or maybe bias (“it can’t happen to me”), people still have confidence in our money. Of course people thought Beanie Babies were safe too. Until they weren’t.

And the “best” thing about helicopter money, and the eventual inflation it will eventually trigger, is that the unpayable national debt will not have to be honestly repaid. Instead it will be “repaid” in severely devalued dollars. Which is the same thing as being defaulted. And it does keep stock prices high, so pensions can be paid, even if the monthly check won't buy much.

(As an aside, why is the economy so chronically crappy, as I keep asserting? Because we spent the last 40 years creating credit and "pulling forward" demand. Borrowing and spending on things we had not honestly earned. With loans out our ears. We can't do that anymore, period. Again, look to Japan....)

I’ve said it before. I’m no fan of the millennials, but I kind of feel sorry for them. They’re being handed a messed up financial state of affairs. But their salvation is that they don’t have much in the way of paper assets. When debts get repudiated, they won’t be the ones holding the bag. Creditors will. And I won’t be a creditor by then either. But to be honest, I don’t really know what price will be paid and by who. I just know that inevitably there will be a price paid. Cuz it just ain’t normal….

A couple tidbits from today….

One, coming as absolutely no surprise to anybody, the Fed today left interest rates unchanged. It did not raise rates that much talked-about quarter point (woo-hoo!). But Fed Chairperson Janet Yellen offered a “hawkish” tone, suggesting that the economy is improving, citing recent “strong” jobs gains, and implicitly suggesting that a quarter-point rate hike is under consideration for the next formal FOMC (Fed) meeting in September. Of course Yellen (and Bernanke before her) have said the same thing after every FOMC meeting for the last several years. Never resulting in a rate hike. And just like clockwork, Goldman Sachs then placed the September rate hike odds at 30%. As if GS should even have standing in such matters anymore. But it’s part of the choreography….

Well let me tell you the real odds of a September rate hike. They’re exactly 0% (zero percent). There is no chance whatsoever that the Fed is going to raise interest rates in September. It’s a presidential election year! As I have said, and will continue to say, we are Japan. Japan’s rates sank to virtually 0% TWENTY-FIVE YEARS AGO! The Japanese 10-year closed this afternoon at -0.29%. Yes, that’s a minus sign. So if you “invest” 10,000 yen in a Japanese 10-year, you LOSE 29 yen per year. Guaranteed! After 10 years of compounded negative interest, you get about 9,700 yen back. And you just might be smart to do that! Mattresses are not terribly great places to hide yen….

There are three reasons interest rates will never rise again, at least not as part of a reasonably normal economy. One, we’re not experiencing the “tepid recovery” policymakers want us to believe. We’re in a SERIOUS DEPRESSION and have been since ZIRP and QE started. We spent 40 years living wildly beyond our means. But that was then. Now we should be entering a decades-long economic contraction. But we won’t. That’s simply politically impossible. Instead we’re keeping the plates spinning by way of 0% interest rates and a profusion of freshly-printed “money” (ha!). Just like Japan. Without ZIRP and QE, asset prices would years ago have collapsed (think 2009 home prices on steroids) resulting in millions of bankruptcies, but today we’d be slowly but surely recovering, though most people would be somewhat poorer. Two, similarly, any increase in interest rates will absolutely clobber the stock and bond markets. That quarter-point increase, should it occur, would shave 10% to 20% (and maybe more) off stock and bond prices (and your 401k or pension) within a day. Permanently. That simply won’t be allowed to happen, as I have repeatedly said. And three, even a small increase in interest rates would cause the carrying cost of Federal government debt to skyrocket. At some point, government insolvency will become so apparent, monetary confidence will be so shaken, that a currency crisis will result.

As good as QE and ZIRP have been at masking the depression, their undoing would equally collapse virtually all asset prices, especially “paper” asset prices (stocks and bonds). It’s a classic case of the cure being worse than the disease. Policymakers have unfortunately chosen the (faux) cure….

Today’s second item of interest was the durable goods report. It was a complete disaster. Orders came in at -4.0% year-over-year and last month was revised downward from -2.2% to -2.8% (those darn minus signs again). The fact is, there is not one economic statistic that remotely points to economic recovery that isn’t a total fabrication (e.g. the BLS jobs statistics) or the direct result of Fed intervention (e.g. the stock market).

So let me see if I have this right. Today, gold was markedly higher, oil was markedly lower, the dollar was “down.” treasury yields fell substantially, durable goods tanked and the Fed did not raise interest rates. Yet Janet Yellen said the economy is strengthening?!

Wow. Just wow. How stupid does she think we are? One has to admire the aforementioned choreography behind the economic illusion; the pronouncements are carefully planned. But the choreography could not be successful except for two factors. One, thanks to the Fed, bad news for the economy is now good news for the stock market and other asset prices. In fact, these days, stocks are actually safer than bonds! Talk about a world upside-down! And two, very few people understand any of this. And the media just prints what they're told. That’s why it works so well….

So here we go again….

The second-quarter GDP number came out Friday morning. Q2 (April-June) “economic growth” came in at a 1.2% annualized rate. Q1 was adjusted downward from 1.1% to 0.8%. Another unmitigated disaster. Bloomberg Econoday predicted a Q2 2.6% increase. Nevermind that GDP numbers are improperly measured (on purpose) and biased upward (on purpose) in several ways. And nevermind that the $3 trillion or so in freshly-printed money is responsible for ALL economic “growth” mustered over the last few years. That “growth” is just as ephemeral as much of the “growth” of the preceding four decades, most of which resulted from gargantuan borrowing sprees. Wee!!!

And of course the markets responded absolutely predictably to the really REALLY bad economic news. Stocks again hit new all-time highs! (And bond yields dropped like a stone, sending bond prices much higher too.) Why would stock hit all-time highs in a terrible economy? Again, because bad economic news is now good news for stock prices. Bad economic news means the Fed will remain “accommodative” and continue its “heroic measures” by keeping interest rates at nearly 0%. And it will continue its jawboning of more quantitative easing (thin-air money printing). And it will likely even violate black-letter law (!) and just outright buy stocks or stock futures with its newly-printed trillions. Which we’ll probably never know because we’re not allowed to audit the Fed. Gadzooks!!!

In anything other than Wonderland, news such as we had on Friday would have sent the stock market markedly lower. But in Wonderland, stocks and bonds BOTH respond positively to bad news (on purpose). The Fed has destroyed the financial markets and anything resembling unfettered price discovery. We no longer have any idea what financial assets (or other investment assets, e.g. real estate) are “worth” (compared to other things of real value, not fiat dollars), and that inherent worth no longer bears any relation to the price at which those assets are traded. All we know for sure is that such assets would be worth much less (in dollars) if there wasn’t another counterfeit $3 trillion available to spend. For now anyways….

Bloomberg, predictably, spun the awful GDP report positively. I won’t go into the jabberwocky they spewed all day Friday, nor that of CNBC. Suffice it to say they found a silver lining where absolutely none exists. But today (Sunday), while traders are distracted by family, the beach, etc., they are coming clean. Remember the Goldman Sachs prediction that I posted last Wednesday, that there is a 30% chance of a September rate increase. Well Bloomberg, they of the rosy 2.6% growth prediction, are now predicting (click here) a 0% chance of a rate increase anytime this year. Whodathunk???

(As an aside, between the politicos and their media mouthpieces (like Bloomberg), there may be some “cookie-jar” accounting going on, meaning that the last two quarters were targeted even more downward, so that the upcoming (late-October) numbers have room to come in much better. Just in time for the presidential election. My prediction is for Q3 GDP “growth” coming in around 2.5% to 3% -- that will be the headline. And the “apolitical” (haha!) Fed will be ready to buy the stock market in support of the “improving economy” narrative. Let’s check back in three months….)

(As another aside, most times I will put the word “growth” in quotes, because in Wonderland “growth” does not make us better off. It just means we buy more stuff….)

In the meantime, here’s what you have to know. We are Japan. Decades ago, Japan goosed their economy with massively-borrowed money. The “Japanese Miracle” they called it. They bought things like Rockefeller Center and Pebble Beach GC for billions. Then, 25 years ago, the buying spree necessarily crashed, and their central bank (the Bank of Japan) began intervening with “heroic measures” that continue today. Now Japan’s national debt is 250% of their GDP and they are on the verge of economic collapse, even with negative interest rates! The only way to prevent that outcome here is to grow a pair, allow (encourage) debt to be repudiated, and let asset prices collapse. And the sooner the better. But you can always, ALWAYS count on politicians to kick the can. It's in their DNA. So they do. They and their cronies do everything they can to keep asset prices high. The inevitable result of which will be a currency crash. That happens when the general public of whatever effected economy (e.g. ours) finally wises up to the (non) value of their “money.”

Japan is now seriously considering “helicopter money” in the form of “perpetual bonds.” Bonds with no maturity/repayment date. What?! Publicly, they (Abe and Kuroda) are “scoffing” at the notion. So you know it’s at least on the table. Like NIRP is scoffed at here in the U.S. And when the cracks get bigger, they become real. I’m having a hard time getting my arms around the notion of perpetual bonds, much less figuring out how they would be priced. But I can’t imagine they would be priced much different than a 30-year bond. In Wonderland, 30 years is pretty much more than what we have left. Quantitative easing is kind of like a nursing home for the economy. Perpetual bonds are kind of like hospice care….

Honestly, I think all this is a much more important issue than what will become of Lakewood Hospital. But I also know that it’s arcane and easily (preferably?) ignored. So it is. Until it can't be....

From yesterday’s Wall Street Journal. It’s behind a paywall so no link….

”Inflation has finally returned to the Federal Reserve’s 2% goal after undershooting it for nearly five years. Now, just as the central bank has inflation where it wants it, economists and central bankers are starting to think the 2% goal, and how it has been implemented in many places, was a mistake.

Spooked by inflation spikes during the 1970s and early 1980s, central bankers had come to view inflation targets as a core tenet of sound monetary policy. In the 1990s and 2000s, many picked a 2% target, seeing it as not so high that it would disrupt business decisions and wage negotiations, and not so low that it would make interest rates unmanageable.

Let me translate that for you….

”We’ve finally created enough new money (credit) that, despite the horrible economy, inflation is now up to 2%. Whew! Now we want it to go even higher.

Just how does anybody know that 2% or 3% or 5% is “just the right amount” of inflation? Answer: They have no idea. They’re just making stuff up as they muddle along. They just know that they prefer chronic inflation.

The fact is, inflation is not “sound monetary policy.” That's absurd. Inflation is a contrivance designed as a way to (1) devalue (slowly discharge) debt, (2) lift asset prices, and (3) tax traditional savings. All of which are bad for the average person, and good for people with lots of assets and borrowed money. Especially when interest rates are artificially suppressed, as they are now.

And heck, if they want to create inflation, there’s a much easier way. Just send a check to every household in the U.S. Print the money. $5000 per household should assure a spike in inflation to at least the 3% to 5% range. So why not if it’s so straightforward? Answer: (1) Creating inflation in that way would give the Average Joe an even shake, and more to the point, (2) the Average Joe won’t use the money to buy assets. The Average Joe would spend it at Walmart and Best Buy. Better instead to create credit, because credit reaches only the “creditworthy” and is used mostly to keep stock and other asset prices high, at least for now. I think it was 2013 or 2014 that publicly-traded companies spent more money buying back their own stock than the sum of their annual combined 2014 profits. If that doesn’t blow your mind then you’re not thinking….

Have you ever noticed that, from time to time, the mainstream media trots out the central bank canard that deflation is simply intolerable? Which it surely is, if you own a lot of stocks, real estate and similar assets. Or underwater mortgages, like the Fed. But a harsh deflationary cycle would be the best thing ever for my 25-year-old daughter just starting out.

So they put out advance notice of coming monetary monkeyshines behind paywalls where the little guy isn’t looking. And even if he was looking, the little guy doesn't understand it, and can’t get his hands on the newly-created credit. But the takeaway is simple. The word is out….

(This post only starts out with regards to public employee pensions. It quickly morphs into central bank jabberwocky, and some Trump bashing, which is why it is here and not in my pension thread.….)

After you understand public employee pension malfeasance, you stop being annoyed by the corruption and incompetence that has led to this impending disaster. Instead you just start chuckling, but while also contemplating and preparing for the inevitable monetary bailout (in some fashion TBD) of public employee pension plans.

HEADLINE (from the Center for Retirement Research at Boston College, click here): State and Local Pension Plan Funding Sputters in FY 2016

Turns out that in FY2016, a group of 170 large state and local pension plans reviewed by Boston College returned an abysmal 0.6% (after the 2-3% grifted by the connected intermediaries). That compares to the average assumed return of 7.6% that public employees promised themselves, and therefore is needed to keep these plans from falling even further behind. So as a result these 170 plans now have only 68% of the money needed to pay the benefits that public employees promised themselves. That’s down 5% from the 73% funded level at the end of FY2015. Good job!

The first question of course becomes “what’s next?” The correct answer of course is “who knows.” But understand that the magnitude of the problem is now in the several trillion dollar range, depending on who you ask and the assumptions you make. That dwarfs defaulted mortgage, student loan, auto loan and credit card balances COMBINED. So it’s not going to just fix itself. It needs intervention.

Here are the possibilities, in no particular order….

1…. Taxpayers are compelled to make up the difference. The fact is, it’s happening already. We’re asked to pay more and more taxes at all levels to rebuild our roads, restore safety forces, fund education, etc. But money is fungible. You can bet that a good chunk any additional tax money, regardless of what projects and initiatives were promised, will instead go to keeping the pension plates spinning. And the roads, bridges and other infrastructure and service levels will continue to deteriorate. After all, how did the roads get so bad and services so depleted in the first place? Where did all that money go? A rabbit hole?

2…. Pension promises are broken and public employees are required to take a substantial haircut on their promised benefits. On a significant scale, this is very unlikely. Despite being currently insolvent, most state and local plans are still paying 100% of promised benefits and have no plans to institute benefit cuts. Ohio teachers, insofar as they did take a significant cut, are in the overwhelming minority. And Ohio teachers may in fact have limited the damage and done the smart thing. Time will tell.

3…. New “money” is created and inflation is purposefully introduced to diminish the funding gap. Inflation is, of course, a stealth tax, especially when it results from fiat money creation. That’s why the government does it. Heck they even acknowledge a 2% inflation “target” when the obvious inflation “target” should be 0%. Inflation steals your money every year, without the bother of even writing a check, and distributes it to “others” who I will elaborate on momentarily. Inflation is sort of like auto-paying even more taxes. Except the auto-payments don’t show up on any statement anywhere.

Of course inflation steals your purchasing power year in and year out, especially these days on your savings, by making the things you need (food, shelter, etc.) more expensive. But, and here’s the key, inflation likewise increases asset prices (stocks, real estate, commodities) and thereby helps reduce the public employee pension plan funding gap, at least on paper. But at the cost of higher prices for everything you need in your daily life.

By the way, there are the “others” (mentioned above) who are the beneficiaries of the wealth stolen by inflation. Who are they? Simple: debtors. People/companies/entities who owe money, because the value of what they owe is diminished by inflation. And of course there are no bigger debtor beneficiaries than governments and their political affiliates (banks, public employees, favored industries like automakers, etc.).

Oh, and finally, how do you create inflation, repudiate debt and lift targeted asset prices all at once? Again, simple: create more “money” (credit actually) and put it in the hands of the wealthier segment of our population. The inflation part has been tricky so far because the economy on main street is so lousy. But give it time….

4…. Portions of private savings (bank/brokerage accounts) and retirement plans (401k’s, IRA’s) are confiscated in a good old-fashioned “bail in” like what occurred in Cyprus a few years ago. Proceeds of which would be used “for our benefit” to retire government debt and (as money is fungible) bail out certain favored, insolvent institutions (pension plans, banks). I consider this a longshot even if (like Cyprus) the bailout is imposed only on substantially wealthier individuals. Especially after Trump (thankfully) just killed Barky’s stupid MyRA initiative, signaling that government is not so interested in nationalizing retirement savings beyond Social Security, which you should note is not paid by most public employees and has not yet been imposed on incomes above a threshold. Only private sector working stiffs pay Social Security. Leona's little people….

So which is it? My money is and has been on #3, the creation of money from thin air and the inflation that will eventually result. The problem is so big and the solution so elegant. By creating money from thin air, you can funnel it wherever you want, like to wealthy individuals and connected entities who use it to buy traditional investment assets (stocks, bonds, real estate) instead of more junk at Walmart. And to states and local governments to restore the funding levels of their deadbeat pension plans. Plus, eventually, you get the benefit of inflation, which will devalue debts, most of which is held by government and its political affiliates. Even in a lousy economy. It’s a win/win!

So the final question becomes, what to do? That’s simple too: get into debt and buy assets! If you can. Of course that ship began sailing about 6-7 years ago with Quantitative Easing (“QE”), which is Princeton-speak for creating more “money” from thin air and giving it to your friends to invest in sure-things. And with the chaser of interest rate manipulation to virtually 0%. The insiders knew the score, of course. I was somewhat late to the party, having gone pretty much back all-in into the stock market only about 3-4 years ago, after selling all the stock in my retirement accounts in 2007 before the crash (which I wrote about back then, you can look it up). And I did borrow a bunch of money 3-4 years ago which I piled into investment assets, including stock and lakefront property (in 2013). I mean they pretty much waved their arms and demanded it. Not sure how I’ll pay it off yet but hey I’m in good company there….

And I don’t think it’s too late, though I do think the easy money has already been made and from here you take some chances. There’s still money to be made in stocks and bonds, because if there isn’t, public employee pension plans and a lot of other favored institutions (e.g. banks) go down for sure. I think that by putting money into investment assets, the worst possible outcome is that you break even with inflation. As they say, "don't fight the Fed...."

[As an aside, and skip to the next paragraph if you want. One bullet the Fed has presumably not shot yet is direct buying of U.S. equities (stocks). Of course we are not allowed to know whether this in fact is already taking place because we’re not allowed to know how the Fed, a privately-run company owned by the big banks, invests the "money" it prints. The Fed won’t allow itself to be audited. But we do know that the Bank of Japan is far and away the largest owner of Japanese equities. Remember like I have said before, we are Japan. And we also know that the Swiss National Bank is a substantial owner of U.S. equities, the SNB does get audited I guess. That the Fed itself may in fact already own U.S. equities (illegally) would not be surprising at all. And if it does not (and who knows), it would also not be surprising if the direct purchase of U.S. equities is the next Fed initiative. That would support further equity price increases, which may be needed since the Fed is now raising short-term interest rates, finally. At least a little bit….]

The real wild card, and possible signal for the end of the asset price run, is Donald Trump. Specifically, when do the real powers decide to end the asset price run, perhaps even tanking prices, and pin it on Trump? Since Trump has so foolishly claimed credit for the stock price run-up that has occurred since his election. Like a dope.

So that’s what I’ll be watching for next, is for signs that the powers-that-be are ready to pull the punch bowl, unless Trump plays ball. Which my guess is he will, and is. I mean look how fast he has already abandoned his campaign rhetoric. And look at how ineffective he is. That’s why I think the monetary jabberwocky continues, stock/bond/asset prices keep rising, and public employee pensions and other debt-laden institutions get their stealth bailouts. He gets that it’s play ball or else. Heck he even mentioned the possibility of keeping Janet "Old" Yellen as head of the Fed! Even if Trump plays ball, I'm starting to ease out. Like I said the easy money is already made and I am 62 years old. But if Trump all of a sudden does go populist like he said during the campaign, you’d be wise to sell with both hands. That's the bottom line.

Whew…. Thanks for reading…. Time for work….

So it’s been awhile since I’ve written about the atrocities committed by our central bank, the Federal Reserve. The private company (!) that controls our “money” supply and manipulates interest rates, supposedly under congressional supervision and for our benefit. Supposedly….

There are two reasons it’s been awhile since posting. One, the outcomes have been entirely predictable. Stocks have continued going up (or at least have not gone down), and interest rates have gone down (or at least have not gone up, not much especially considering their historical lows, the recent quarter-point Fed rate hikes, and the expectation of more hikes to come). That’s helped the rich get even richer and has bailed out the world’s biggest debtor, the US Federal Government. Which of course is why it’s happening. Heck even little ol’ me, over the last few years I’ve made as much money sitting around doing nothing than I do by actually working. At least after taxes, because “earned income” is taxed at a much higher rate than “passive income.”

But the other reason I’ve not written about it is because it just pisses me off. There are people who I care deeply about who are getting absolutely gored by insane Fed monetary policy, and yet they don’t know even it. Like my kids (and yours), who can’t afford to buy a house and whose rents are sky high. And who are now paying double for the stocks they put in their 401k, thereby doubling the cost of retirement. And my older friends, whose savings now earns somewhere in the neighborhood of 2%, and are scared shitless of the stock market, and with good reason. Maybe you have parents in that situation.

But I’ve decided to try to lighten up. And I hear that the way you do that is by typing “haha” after everything you write. At least that’s what I see when I get text messages.

So here goes….

I cannot fathom the concept of “money” that can just be wantonly printed into existence in enormous quantities, trillions of “dollars,” sort of like Beanie Babies. On a whim by a private company owned by private companies. Haha!

Yet I’m being asked to blithely accept promises backed by limitless paper, debt monetization, interest rate suppression, inflation of the money supply and the central bank’s balance sheet, macroeconomic meddling, maintenance of a banking cartel, central bank purchases of crappy mortgage debt and even common stock, insider dealing and un-auditability that immeasurably increase the wealth and power of the entire banking complex to where it has become 20% of our economy, but builds nothing.

Ha-ha!!

And now I read just yesterday that Chicago Fed president Charles Evans was quoted as saying that endlessly higher prices will make our lives better, to wit “The first order thing for Fed policy right now is to get inflation up to our objective.” (click here)

Hahahaha!!!!

Well it’s a good thing Evan set me straight because I always thought that the job of the Fed was exactly the opposite, to protect the integrity and buying power of our money. For the sake of people who rely on it as a “store of value,” as we all were told in high school. But this newfangled "inflation targeting" thingy must be OK after all because Evans is real smart and nobody seems to disagree with him except me. And maybe Ron Paul. And everyone knows Ron Paul is just a doddering old fool who actually thinks we should stop fighting all our overseas wars and nutty stuff like that.

Why is this “haha” thing not working?