“I cannot accept that course of action.”
~ Robot B-9, Lost in Space
Written by Bryan Lutz, Editor at Dollarcollapse.com:
The US of A is 247 years old…
The Fed is approaching 115 years…
Biden is 81 years old…
And then there’s this unacceptable course of action – Even Bill Mumy, who played Lost in Space‘s Will Robinson turns 70 this year.
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The most important things in America are getting so old, tight and crotchety that every step needs to be checked and re-checked before moving forward. Actually…
Any move the Fed makes at this point could end in disaster.
Fed Chair Powell testified before congress yesterday on just that…
Here are Powell’s prepared remarks:
“We continue to make decisions meeting by meeting. We know that reducing policy restraint too soon or too much could stall or even reverse the progress we have seen on inflation.
At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face.
Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”
In a few words, what do Powell’s words mean?
The Fed is having trouble fulfilling it’s two mandates:
Maintain Price Stability (a 2% inflation target)
Manage Employment (a small amount of unemployment is good.)
The Fed Chair is stuck.
Powell admits they are having trouble with both.
First, inflation is still not hitting the famed 2% target.
If the Fed lowers interest rates, they risk causing higher inflation.
Second, they also risk too low unemployment, which risks causing a shortage in the labor market.
So the wires in the system are crossed, while the Fed, in a making of their own mess, is lost in space.
Powell has no clear direction on how to move forward, except to say that they’re making decisions meeting by meeting because they’ve printed themselves into danger in every direction…
Until they choose to make a move…
Much like the Robinson family receiving alerts from Robot B-9 of environmental hazards, mechanical failures, or resource shortages…
So the Fed’s not going anywhere. Interest rates stay as is, for now.
Maybe there is one danger the system can’t fix…
The Federal Reserve has run its course…
Debt is too high…
The economy is slowing down…
And less people want American debt.
The Keynesian experiment is old enough now that it’s coming to a close.
It’s looking that way for America’s President too.
That no matter how much a person defiantly argues…
“I’m not going anywhere.”
He’s going somewhere.
Everyone knows the truth.
It’s the explanation they’ve been waiting for…
Some systems are old and need to get laid to rest.
