Last week, CNBC tried to milk the most out of an interview between Steve L(ies)man and Federal Reserve Vice-Chairman Stanley Fischer, and sure enough, the 15 minute segment caused the algo’s to soar, and stocks on all three indices to move into the green. But when you actually look at what Fischer said about the potential raising of interest rates in September, it was absolutely nothing different than what has been said by all Fed officials going back to October of last year.
In the chart if you look at the first dip, you can see several times where the markets rose in spurts, and ironically, they occurred each time they re-ran the interview on Friday.
Stanley Fischer is considered by the mainstream to be the ‘most reasonable’ of the Fed heads, but in reality he is simply a tool for the elite. In fact, David Stockman wrote this today after watching the escapades of the American-Israeli citizen, and former Chairman of Israel’s central bank.
With every passing week that money markets rates remain pinned to the zero bound by the Fed, the magnitude of the financial catastrophe hurtling toward main street America intensifies. That’s because 80 months—– and counting—–of zero interest rates are fueling the most stupendous gambling frenzy that Wall Street has ever witnessed or even imagined. Sooner or later, therefore, this mother of all financial bubbles will splatter, bringing untold harm to millions of households which have been lured back into the casino.
Accordingly, after 80 months of showering Wall Street with what is a wholly unnatural and perverse financial windfall—-that is, zero cost in the money market—–the Fed has ignited a rip-roaring inflation. But the inflation is in the financial market, not the supermarket.
Needless to say, there was not even a faint trace of recognition of this fundamental reality in Stanley Fischer’s much heralded Jackson Hole speech on inflation. As usual, it was an empty bag of quasi-academic wind about utterly irrelevant short-term twitches in various inadequate measures of consumer inflation published by the Washington statistical mills. Indeed, Fischer went so far as to acknowledge that one of the more plausible consumer prices indices—–the Dallas Fed’s “trimmed mean” measure of the PCE deflator—–was up 1.6% in the past year.
Here’s the thing. No one except the modern equivalent of medieval theologians counting angels on the head of a pin could think that the difference between this reading and the Fed’s arbitrary 2.0% inflation target is of significance to any economic actor in the real world. – David Stockman’s Contra Corner
But alas, Stanley Fischer is not the only idiot clown controlling the world’s financial spigot and monetary policy. For nearly a year Janet Yellen has played her best imitation of Mario Draghi, and jawboned over and over how great the economy is, how great unemployment numbers are, and how deflation is killing asset prices.
And with hedge funds, stock investors, and the entire Western financial world in fact waiting for some small bit of guidance from the Fed, it is unlikely that it will come anytime soon. Just ask several financial reporters who no longer believe a single word from the world’s primary central bank.
Now comes one of the world’s top monetary reporters, Ylan Q. Mui, to make a delicate observation at the Washington Post’s Wonkblog, in Why nobody believes the Federal Reserve’s forecasts. Mui:
“The market recognizes that the Fed has repeatedly erred on the optimistic side,” said Eric Lascelles, chief economist at RBC Global Asset Management. “Fool me 50 times, but not 51 times.”
Even the government’s official budget forecasters are dubious of the Fed’s own forecast.
This is a theme that Mui has touched on before. In 2013, she wrote Is the Fed’s crystal ball rose-colored?:
The big question is whether Fed officials can get it right after years in which they have regularly predicted a stronger economy than the one that materialized. In January 2011, Fed officials predicted that GDP would grow around 3.7 percent that year. It clocked in at 2 percent. In January 2012, they anticipated growth of about 2.5 percent. We ended up with 1.6 percent.
To give Ms. Mui’s competition its due, Dr. Richard Rahn at the Washington Times last April crisply noted:
The Federal Reserve had forecast the U.S. economy to grow about 4 percent near the beginning of each year for the last five years. But during each year, the Fed was forced to reduce its forecast until it got to the actual number of approximately 2 percent. (Other government agencies have been making equally bad forecasts.) These mammoth errors clearly show that the forecast models the official agencies use are mis-specified and contain incorrect assumptions. – Forbes
The reason I point this out is because right now, the Fed, mainstream media, and even politicians are trying to put the recent stock market declines on China, and their economic slowdowns and equity crashes.
But China does not control global monetary policy… the United States does through the reserve currency and the petro-dollar. And since they couldn’t blame the real culprits (themselves) when dollar policy back in 2009 led to global commodities being too high for many Arab countries and resulted in massive protests and even revolutions, blaming a country like China, who’s currency floats far less than even the Euro or Yen, as the catalyst for the ongoing breakdowns proves that either the Fed is no longer in control, or is working extremely hard to deceive the public and Wall Street that they do not know what they are doing.
Watching events unfold around the world is important, including ANOTHER chemical warehouse explosion that took place just today in mainland China because these events are being orchestrated by intelligence services attempting to keep the world’s eyes off the real instigator of the coming collapse, and to try to create a war or conflict to pacify the citizens who are growing more and more fearful as the Autumn comes upon us. But make no mistake, it is not China, nor oil prices, nor Ukraine and Yemen that are at the heart of what is coming, and instead keep the focus on the Federal Reserve, because their actions in the coming weeks will decide just how long, and just how difficult the next global collapse will be. Because if we learned anything from last Friday, the markets and the algo’s are tied intrinsically to what comes out of the mouth of the most ignorant people on the planet.