U.S. Fed Leaves Rates Unchanged, Morons

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Should anyone take the Federal Reserve seriously anymore? The Fed left short term U.S. rates at 2% yesterday, though in real terms, interest rates are below the rate of inflation and therefore negative. Not exactly hawkish. The Aussie dollar moved toward 96.

Does the hubris of a central banker know any bounds? The Fed had the audacity to puff out its chest and talk all tough about inflation. “Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased.”

That’s right you clowns. Inflation expectations are higher because you stepped in and bailed out Bear Stearns cut interest rates 325 basis points. And you act surprised that it set off a wildfire in commodities?

Speaking of morons, what about the U.S. Congress? But in the U.S., we have investors noticing that the Fed is torching the currency. Not wanting to see their savings inflated away, investors race for assets which protect their wealth and purchasing power, namely commodities. What does Congress do? It wants to make it illegal for pension funds to invest in commodity indexes!

Are these people really serious? Are they asinine or just equine? How degenerate has the American political establishment become?

The Roman historian Suetonius reports that the Emperor Caligula made his prized horse Incitatus a first citizen of Rome and later a Senator. The story-we don’t know whether it’s true or not-is often used a cautionary tale for how debauched and dysfunctional Rome had become as an Empire.

Frankly, we think a few horses in the U.S. Senate might improve the place. You have to think horses would be natural small government conservatives. They say “neigh” all the time.

Dan Denning
The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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5 Comments on "U.S. Fed Leaves Rates Unchanged, Morons"

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John
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haha worst punchline ever!!

GaryB
Guest

Good call Dan – morons, clowns, horses’ arses. It’s all about Wall St for the US Fed. Stuff the rest of the US and stuff the rest of the world. It seems that for the Fed, with its 2% cash rate, raging inflated commodity prices is the price the rest of the world has to pay to prop up Wall St.

catalyst
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“They will have to slam on the brakes. There is going to be a deep global recession over the next three years as policy-makers try to get inflation back in the box.”

Ross
Guest
If you run your own website and have developed credibility like the Daily Reckoning you deserve your place on the soapbox and we benefit from the polemic. You have however also provided a window here for your readers and I am going to take advantage … The fed’s reaction only reflects the US cultural malaise and a lack of world citizenship that has been growing through the 20th century. A lack of rigour in instilling the US’s foundation values has corrupted the elite fraternities that spawn both republican and democrat. And yet it could easily get far worse under a… Read more »
tom
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All this Fed bagging has taken the flak off Bush. The RBA’s decision to hold rates is prudence. I see it as a moral victory (the horse voted to hike rates). GM is rationalizing its product range and Ford may bring back the all-black Model T. It’s a good thing economies of scale is back on the agenda because quality was never their cup of tea. Investment banks like Lehman Bros are right-sizing their human resources. Probably a good sign considering the past decade has been nothing short of a fully fledged Roman orgy for them. A host of other… Read more »
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