“The clue,” Holmes said, “was what the Fed did in the night-time,” “But the Fed did nothing in the night-time,” protested Inspector Gregory. “Exactly,” said Holmes. “That was the curious incident.”
We expect few today to be familiar with the Sherlock Holmes’ “Adventure of Silver Blaze;” we hope more are paying attention to the Federal Reserve. Because it is a very telling incident indeed that the Fed has done nothing to raise interest rates after a lengthy and laborious preparation to do just that.
New Fed Chairman Janet Yellin has followed her predecessors Ben “Helicopter” Bernanke and Alan Greenspan in selling out to the politicians instead of protecting the hard earned wealth of Americans. In of course, our opinion.
Hobson’s choice was no patch on what faces Ms. Yellin. Does the Fed raise interest rates from zero, individuals, businesses and governments with large debts will suddenly owe more than they can repay; their defaults will take banks that hold those debts as assets into collapse. Fast, too. Too many huge borrowers are too close to the edge, creditwise. The politicians who have brought all this about by their overspending will anoint Ms. Yellin as perpetrator and hang her, though they, more than she, have done it.
The politicians want to pass the next election before any financial collapse. They will be thus, safe for another two, four or six years at least. “Kick the can down the road” is the name this political strategy, in the hope of passing the problem to one’s successor. Yeah …
But there is a price: The financial collapse postponed, is a much worse collapse. The defaulted debts and so the losses, are higher, the numbers of ruined people, therefore larger. Politicians adopting kick the can don’t care; they expect to depart before it hits. The bag is always held by hapless citizens. Just now, the bag consisting of a mild stock market decline, is in Ms. Yellin’s hands, but it is a relatively small bag.
What this seems to tell us is that the Democrats are able to control the Fed for political goal tending. While they all must know that it will all come down, they are determined that it come on a GOP watch, not while Democrats are in sight as responsible. After the 2016 election, then. Let a Republican president be the next Herbert Hoover. And Ms. Yellin seems disposed to accommodate.
An honest politician has been defined as one who, once bought, stays bought. Will that be Ms. Yelling?
But … Suppose la Yelling sees the collapse imminent, relentlessly prior to that election … will she then do a Samson, pulling down the temple on her own head, in hope of the incoming GOP keeping her on at the Fed? Who knows?
We have long since given up the idea that any of the mighty serve any interests but their own and we aren’t privy to those. But we will see. What matters is its’s all coming down; we’re debating about when. We would be wiser to bet on the day the ice melts in Alaska’s Tanana River; at least there’s a prize for guessing that.
But our hats are lined with tinfoil; what do we know?