WATERFORD, Ireland – The stock market – where shares in profit-making companies are exchanged – went up again yesterday.
The Dow went up another 110 points.
Does this mean the outlook for making money is improving? Does this presage higher dividends for the stockholders?
What, exactly, do investors expect?
More of the same, is our guess.
Hillary in her Heaven. Yellen on her throne. And now, Fed Governor Lael Brainard is said to have the inside track for the top job at the Department of the Treasury.
Wait a minute…
The Fed is supposed to be non-political. Yet here is a Fed governor angling for a job in the next Democratic administration.
In the run-up to the presidential election, mightn’t she be inclined to keep stock prices high and interest rates low?
Mightn’t she be tempted to want to give her next boss a little boost?
What steel strengthens her backbone, lest she bend to pick up the lure?
What wax fills her ears, lest she hear the sirens’ call?
Bloomberg reports an exchange on the subject between Republican Congressman Scott Garret and Ms. Yellen.
“Yellen cornered by lawmaker in heated exchange over Fed politics,” reads the headline.
The press focuses on the “politics” between Democrats and Republicans and the potential conflict of interest involved: The Fed can cause a boom or a bust, thereby favoring one candidate or the other.
But there’s a far deeper conflict of interest that the press has missed: Democrats and Republicans share the same bias.
It is the Fed’s bias, too – an abiding prejudice towards the Deep State.
If the Fed were really apolitical, it wouldn’t care if stock prices went up or down.
Nor would it care what interest rates borrowers were paying. It would stand back and let willing buyers and sellers discover prices on their own.
After all, that’s the way markets work: always rewarding success and correcting mistakes.
A market that does not correct is like a bathtub without a drain. It fills up with errors, misallocations, zombies, and cronies – all floating on the surface, like scum.
Honest central banks are supposed to keep their distance from politics – and let the tubs drain. They are supposed to be impartial… and not just between Republicans and Democrats.
They are not meant to favor buyers over sellers of stocks… or borrowers over lenders…. or labor over capital. They are meant to protect the realm’s money and nothing more.
The Humphrey-Hawkins Act of 1978 expanded the Fed’s job, charging it with maintaining full employment, too.
The Fed shouldered this new responsibility with the lusty enthusiasm of Paris carrying away Helen of Troy: It was bound to cause trouble, but it might be fun.
It was (and still is) widely believed that the way to add jobs was to destroy the value of the nation’s money. This the Fed has done with gusto.
Since 1971, when President Nixon ended the last vestiges of the gold standard, the dollar has lost 80% of its buying power.
Now, the Fed has no intention of letting “sound money” get in its way.
The current system suppresses markets in order to deliver trillions of greasy dollars to Deep State cronies.
That’s the whole idea: to avoid corrections and keep the money flowing.
And protecting the system – a scam based on a fake dollar, fake interest rates, fake stock prices, fake statistics, and a fake economy – is the Fed’s No. 1 concern.
That’s why it is “data dependent”; an honest Fed wouldn’t care about data. That’s why it hesitates to raise rates; an honest Fed wouldn’t have lowered them in the first place. That is why it watches over the way the cards are dealt so carefully; it needs to make sure the right players get the aces!
The Fed practically created the swindle. Today, it manages the hustle to keep the wealth flowing.
That, much more than favoring one party over another, is the Fed’s conflict of interest: Between markets and politics, it favors politics.
For the good of the nation?
Hardly. Since the market bottomed in 2009, savers have lost $10 trillion. Creditors have gained (at least on paper) far more. Household wealth is up $33 trillion in the U.S. (most of it in the households of the rich). Growth is down. Productivity is down. Wages are down for most people.
The Fed has acted in favor of the few and to the detriment of the many.
It… along with its employees, bosses, cronies, and drinking buddies… is firmly ensconced among the “One Percent” of the Washington-Manhattan axis.
Rather than recognize any “conflict of interest,” it ignores its own biases in order to keep the racket going.
BY CHRIS LOWE, EDITOR AT LARGE
Gold is under pressure…
As you can see from today’s chart, since peaking at the start of August, the yellow metal has been in trouble.
When an asset begins to make a series of lower highs and lower lows, as gold has done over the past two months, it’s a bearish trend.
There are less than three days left to try out Bonner & Partners’ newest investment service. So please watch this video before you lose your chance to hear all about this simple and wildly profitable trading strategy from Chris Mayer – the only analyst that Bill Bonner follows with his own family trust money.
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Lately, Bill has been taking aim at the “Big Top” spectacle of the U.S. presidential elections. Not everyone appreciates it…
You can afford to live any place in the world, be comfortable, and let the world tear itself apart – with you having a window view! Please stop calling our political representatives names and comparing them with simians. Let us live our world and handle it the best we can.
Your remarks did not change my view of the candidates; it only raised my eyebrow at your comments! If we believe that one of them can give us a little bit of hope. LET IT BE, LET IT BE! Thank you, sir.
(All of my life, I have been dreaming of a life in Argentina. Now I see that the political sewer pipe runs the length of the world.)
– Carlos F.
Meanwhile, a controversy has broken out over a version of the Bible Thomas Jefferson created in the later years of his life, after Bill mentioned it as one of Jefferson’s many accomplishments.
Here’s the comment from yesterday’s Mailbag that kicked it off…
In listing the accomplishments of Thomas Jefferson, you stated that he devised his own version of the Bible. To be more accurate, you might refer to it as a desecration of the Bible.
Since you have referenced it, you must be aware of the finished product referred to as the Jefferson Bible. To save time and space, he removed all references to the supernatural, or miracles, and all reference to the Spirit of God.
That’s like a car owner removing the fuel from its tank.
– David B.
And here’s today’s response…
In reference to David B’s remark about the Jefferson Bible: Get your facts straight.
It would appear that many of your readers – and possibly you, too – believe that our Founding Fathers were not fully Christian. That’s simply not true.
Jefferson removed those portions of the Bible in order to present them to the Indians. To show them G-d’s worthiness. (As a practicing Jew, I never spell out G-d’s full name.)
Jefferson’s first intent was to teach the Indians Latin, Greek, and French. However, realizing that having them learn those languages to understand the Christian faith was an arduous and superfluous task, he removed those portions of the Christian Bible to create a smaller book with which he could succinctly show the Indians the Christian faith.
– Edward R.