The archive is catalogued by 'Politics', 'Economics', 'Mockery', 'In other news' and 'On other things' 


"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world" - Henry Kissinger

and yet...

"Sooner or later everyone sits down to a banquet of consequences" – Robert Louis Stevenson

Martin Sandbu thinks the Fed is 'state dependent'

In response to an FT article by Martin Sandbu on 17th September 2015, entitled 'Guessing games have added to volatility'

"In uncertain times, state-contingent policy guidance remains the right approach for central banks"

State-Contingent? As in the early 2014 target of 6.5% for unemployment? Or the slimmed down 6% version? Maybe the lithe 5.5% model? Or even the carbohydrate free target of 5%? Still not good enough? How about a wafer thin 4.8%?

Here's a radical idea. How about measuring 'actual' unemployment, instead of concocting a figure that counts 1+ hours a week as a 'job', ignores the fact that people do 2 or three of these 'jobs' to survive, and discounts unemployed people at the earliest opportunity because they don't count when they are on the non-participation list. It seems that in the cloud cuckoo world of central banking, what isn't counted doesn't matter...even if the Chair is a labour economist who has spent 30 years pondering unemployment statistics.

How about 'inflation'? Ignore for a moment the fact that their target doesn't in any way measure the cost of living, but does conveniently reduce automatic increases to social security...they would prefer something way north of 2%. Why? Because the Fed's preferred solution for dealing with the huge pile of debt is inflation. Why? Because above trend growth is out of the question and they know that. A deflationary collapse is a central bankers worst nightmare, and restructuring the monetary system would require telling a truth they fear to tell - they tried to print their way out of a debt crisis and it didn't work.

The Fed are not data-dependent Mr Sandbu. The data is Fed-dependent. The Fed and Wall Street are co-dependent. Like a pusher and a drug addict they are both invested in keeping this game going.

Apart from the economics of this, being state-dependent requires honesty. The Fed are there to protect the government and the banks. If you trust the government and if you trust the banks, then I understand why you might trust the Fed. I trust neither...and neither do I trust the Federal Reserve.

War on cash Vol 3 - BoE's Andy Haldane

Sam Fleming analyses the September rate rise dilemma