Listening to even a small portion of Simple Janet’s incoherent babble makes very clear that the nation’s central bank is well and truly impaled on its own petard. According to the dictionary, the latter term refers to…..
…….. a small bomb used for blowing up gates and walls when breaching fortifications. It is of French origin and dates back to the 16th century. A typicalpetard was a conical or rectangular metal device containing 2 – 3 kg (5 or 6 pounds) of gunpowder, with a slow match for a fuse.
Maybe that’s what they have been doing all along – – that is, waiting for their slow match monetary fuse to finally ignite the next financial conflagration.
After all, the Fed is now 87 months into its grand experiment with the lunacy of zero interest rates. If our monetary central planners still can’t see their way clear to more than 38 bps of normalization, then, apparently, they intend to keep the casino gamblers in free carry trade money until they finally blow themselves up – – just like they have already done twice this century.
In fact, by Yellen’s own bumbling admission the inhabitants of the Keynesian puzzle palace – -into which the Eccles Building has long since morphed – – can’t see their way to much of anything. They couldn’t even decide if the risks to the outlook are balanced to the upside or downside. And that roundhouse kind of judgment isn’t even remotely measureable or exacting; it requires nothing more than a binary grunt.
This post was published at David Stockmans Contra Corner by David Stockman ‘ March 16, 2016.
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