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.
The Daily Reckoning Australia