Page 1 of 1
The Fed's Impersonation Of The Hunt Brothers Continues
Posted: Wed Dec 04, 2013 1:08 pm
by murphy_p_t
http://www.zerohedge.com/news/2013-12-0 ... -continues
Not that this is actionable, but I found it interesting, if for no other reason than the title and the implication of what a charade the "markets" have become.
Re: The Fed's Impersonation Of The Hunt Brothers Continues
Posted: Wed Dec 04, 2013 6:19 pm
by moda0306
The fed's doing exactly what they have always indicated that they would do in an economy producing 1% core inflation and 7.5% unemployment.
It would be odd if they decided not to.
Further, the article seems to bobb from one statistic to another, complaining about "manipulation," without acknowledging a few important points:
- They first seem to want to complain that the fed is keeping long rates extremely artifcially low, but the ones they hold are paying far higher interest than short-rates. So which is it? Are long-rates too low, or is it unfair that the fed is mopping up all this interest that we're not getting?
- They say that the fed is "dominating the market with manipulation," but forget that this is textbook expected fed behavior. It would be market manipulation to tell people for 40 years that you're going to use (mainly) treasury bond markets to control interest rates and the money supply to balance a price stability target of 2% core inflation, and an unemployment target of 5% (or whatever it is), and then, in the midst of extremely low inflation, and cripplingly low worforce participation, to keep rates at 6% (or whatever these guys think they deserve to earn risk-free), etc. Both liberals and conservatives, borrowers and investors, savers and spenders, retiree an home-buyer alike should have been expecting this behavior when deciding whether to spend/save/invest/allocate.