The Fed & "The Grandest Con Job In The History Of The World"

Tyler Durden's picture

Submitted by Thad Beversdorf via First Rebuttal blog,

I used to get a kick out of the cute little children waiting for the Fed Chair to come and deliver presents or coal.  So giddy and excited from the anticipation of not knowing who Janet thinks were good boys and girls.  Who’s going to be rewarded and who disappointed?  And I don’t know how many people asked me today what the Fed will do.  My answer was “The same f@#*ing thing they always do, nothing.  So stop asking”.

You see if you read some of Stanley Fischer’s early work on the rational expectation model you find that the key to fixing the lack of long term effectiveness to monetary policy is by confusing the working man. The idea being, people will act rationally with the information they are provided and so what typically happens is that people change their behaviour which counters the impact of the policy being implemented.  The solution is to keep us guessing.  And so what they have done for essentially every meeting is nothing.

However, they use the media to talk about all the things they just might do.  And the pundits on television go on and on about all the things that might happen and what the follow on implications will be given those alternatives and then the moment comes and ahhh nothing, damn they fooled me again!  I really thought this time was it gosh golly dang it!.  I guess it was just that this or that was just slightly out of place otherwise they said they were totally gonna do this or that.  So close, but ultimately they are right.  Yep they made the right choice based on all the variables.  They are just swell.

At this point, I just get annoyed with the ridiculous foolishness of people.  We’ve got to start using our own brains.  The Fed stopped using any benchmarks because while the benchmarks were improving, the economy wasn’t and isn’t.  And so they were being railroaded by the transparency that benchmarks provide.  And now it is just a black box of various indicators that will be analyzed in real time to form justifiable actions, far too complex for you and I but trust them that there is a definite method and it’s very quantifiable at that, they just can’t tell us what it is because it would just confuse everyone.

Does anyone really not get it??  I mean I was under the impression that the pundits on television were just acting for the sake of good drama.  Is that not the case?  Are people really still confused by what’s happening in the market and broader economy?  It’s been 6 years of the absolute same bullshit.  How could anyone not clearly understand exactly what is behind the action or non action of the Fed???  Come on people wake up.  Take a deep breath, grab some coffee, do whatever you need to do but please wake the hell up.

The economy is a wreck.  Debt to GDP is at even higher all time record highs than the stock market.  Demand is absolutely dead except for the flooding of debt that continues to bury the average consumer.  None of that equates to economic growth.  It’s just cash flowing today rather than tomorrow.  And so there can be no rate hike.  Not for, well ever.  Perhaps in 2 years we see a token quarter point to make it seem like we’re not completely dead but we are.  Our economy is dead.  You take away the increases to household debt and you have negative GDP.  If you want to keep it in the calculation well then you have to take it out of your forecasts because you can’t count those purchases twice.  And what you buy today with money you don’t have means money you do have in the future will not be available to buy anything.  Is that clear to all?

I might sound a bit frustrated but I am frustrated.  It’s one thing to throw your hands up and say I get the system is a complete sham but I just don’t have a solution.  But please do not sit there and pretend that there are any market forces behind the financial markets other than the Fed.  And please do not pretend that the current policies are expected to generate economic growth.  But please do acknowledge that you understand what is happening here.  If you don’t, well then take a giant step back and have a good look around.   For what is happening is the grandest con job in the history of the world, bigger than the Trojan Horse by at least a few hands.  There is no coming economic growth.  That jump in GDP that they’ve been promising each quarter for 20 quarters now is not coming.  In fact, it only gets worse from here.

And those all time highs in the stock market, well until you cash out, those remain unrealized and I would suggest cashing out.  The reality is the powers that be are out of the market and preparing for a big sweeping transfer of wealth from all those little retirees and soon to be retirees out there that believe the market is no longer a risky asset. Their assets will be picked up for pennies on the dollar.  The point is folks play along for the entertainment of it.  Play along because it’s tradition.  But don’t play along because you think the market is still some random response to fundamental supply and demand relationship. 

The market has not been a function of fundamentals for some time now and is not reacting to them in any way, shape or form.  To wrap this up I think it’s fine to play make believe with the magical Fed Chair and wish upon a star that she will pick you the winner today.  But do it with your eyes open.  Like Christmas, I still enjoy playing along with the kids regarding Santa, but I’m not putting my hopes, dreams and future on him.  Make sense?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
NotApplicable's picture

Problem is, as soon as the MSM questions the con, it stops paying out for them.

Biggest game of chicken, EVAR!

GetZeeGold's picture

 

 

It takes hard cash to keep the lights on at CNN.

 

People still have to use airports.

Pool Shark's picture

 

 

WARNING! OFF-TOPIC!

Since there have been no BitCoin Articles posted in awhile, I thought it was interesting to note that BitCoin is now trading at $313 (US).

What this means, is that if you bought BitCoin at ANY TIME during the past year (except on October 5th), you have lost money.

 

[Where's FoneStar????]

 

Arius's picture

the FED was the greatest thing ever happening to America ....

 

they got your gold fair and square, but giving you one hunderds years of prosperity for it.

 

Now once you become obese, sorry, they got to move to greener pastures ...

 

Please understand nothing personal just business

SheepDog-One's picture

Perhaps, but it only costs $5 to mine a Bitcoin outta the ground.

sleigher's picture

I used to think that maybe there was a chance that BTC was gonna do the "to the moon" rise. Like 1 BTC = $10,000...  

Now I think it is gonna go to $10,000 but a loaf of bread will be $1,000.

KnuckleDragger-X's picture

Sound bites are much easier than technical analysis, especially since the talking heads at place like CNBC can barely balance their checkbook.

DetectiveStern's picture

In the UK the government have to approve you to even own a newspaper. They just print whatever the government tells them while a few run timid articles attacking pointless parts of government policy.

 

I DONT'T GIVE A FUCK IF YOU DISAGREE WITH LOWERING TOP RATE TAX BY 5% WHEN THE BANKS STEAL ALL THE FUCKING MONEY ANYWAY.

Coke and Hookers's picture

"The market has not been a function of fundamentals for some time now and is not reacting to them in any way, shape or form."

The market is inversely related to fundamentals because it's now a function of money pumping - which is inversely related to fundamentals because its goal is to mask them. The worse the fundamentals are, the more the pumping and the higher the market goes. The amount of paper money floating in the system 100% predicts the market, nothing else.

Spanky's picture

...as soon as the MSM questions the con... -- NotApplcable

The MSM question the con? Surely you jest!

Ahoy Polloi's picture

Cute analogy Thad, but I'm pretty sure most FED CHAIRS celebrate Hannukah (just sayin')

 

Me? ~ I'm a FESTIVUS dude. [& on occasion KWAANZA if I happen, which is often, to need to find a reason to PARTY for absolutely no reason whatsoever].

froze25's picture

Festivus is for the rest of us after all. I hear ya if I am feeling the need to say get "jiggy" I too celebrate Kwaanza, its just as real as Santa after all.

Duc888's picture

 

 

 

......could be worse, you could be this dude.

https://www.youtube.com/watch?v=8S65HKNMOjI#t=89

Hahahaha if you see something, say something.

Damed plumbers.  They're all in on it.

GetZeeGold's picture

 

 

They just offered us 100K per truck......who knew?

LawsofPhysics's picture

If anyone was to try and print money for loans without the real collateral or assets to back those loans they would be accused of fraud and counterfeiting, yet this is exactly what the Fed has been doing when it should have gone bankrupt as a bank years ago.

semperfi's picture

laws are for us little people

Miffed Microbiologist's picture

Yes, and only little people pay taxes. And to think Leona Helmsley's dog got a $2M inheritance. The joys of wage slavery.

Miffed

Ewtman's picture

Yesterday’s Fed-speak rally has the folks at CNBC all a-flutter this morning with hopeful anticipation of a Christmas rally just like the old days. And while that could very well happen (irrational exuberance is still in strong supply), nothing actually changed between the close of business Tuesday night and Janet Yellen’s dovish speech Wednesday afternoon.

 

http://www.globaldeflationnews.com/the-fedral-reserve-adds-patience-to-i...


badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

badger10's picture

The bearish factor for me is Switzerland's ZIRP policy which indicates a stronger dollar which is deflationary in nature. Market reminds me of. 1933!

semperfi's picture

I hate to wreck you day but Americans are incapable of waking up.  90% of them are complete dumfucks unwilling to think for themselves.  They don't want to think.

KnuckleDragger-X's picture

I wish I could say your wrong but I can't....

froze25's picture

It only took 5% to throw the Brits out.  As times get worse people wake up.  Once the multi milion dollar class start to feel enough pain I think some intresting leaders will start to pop up.  I already know 1 billionair that is fighting to have Tesla's info released from the Gov.  He is starting to really come around, he is also a big fan of alex jones.

sleigher's picture

I have a heard a few people call into to radio talk shows about the Puerto Rico estate trusts and the USA inc. DTCC and cede and co.  It would seem more are waking up.   Slowly but they are coming around.

BeetleBailey's picture

Most are too fucking stupid to wake up. "Self-forced ignorance" I call it. It amazes me how completely fucking stupid people are - but they are.

Basic civics? LOL....try some elementary questions to the average "Merican" - dumber than shit. Off the charts stupid.

 

...and I'm not some genius....but fuckin A

Winston Churchill's picture

I believe you meant 'exceptionally stupid".

There is a reason I call being an employer in the USA, adult(maybe) babysitting.

The good American job disappeared for a reason.

froze25's picture

I run a dept in Govt.  I can't tell you how many times I have had to deal with "so and so is makeing fun of me" well something to that extent from people 10 yrs my senior.  It really is baby sitting at times.

Winston Churchill's picture

What scares me even more is the most immature are the ones raising kids.

kaiserhoff's picture

I see your point, Winston, but South Florida is not typical of America.

Nor is New York, San Fran, Detroit, Ferguson...

Hmmm.  I need to spend more time back at Mule Creek.

semperfi's picture

typo:  wreck "your" day  (don't want to be accused of being in the 90%) - "dum" as opposed to "dumb" was intentional

tahoebumsmith's picture

Well if their 4 TRILLION dollar balance sheet isn't enough evidence for people to realize what is really happening then the Ponzi Scheme will continue until the whole thing comes crashing down...

Just Take It All's picture

My opinion of humans is at an all-time low.  Not that humans have changed.  I'm just understanding better.

Ancientkarma's picture

If you hear a huge sucking sound,now this may occur when u.s.a.is asleep,it's the dollar getting stronger and bringing home the wealth of( other) nations.

GetZeeGold's picture

 

 

Yeah.....it's the prophecy.

 

Better buy a picture frame to display that bank account statement.....you might have to sell the frame someday for food.

Eyeroller's picture

<<Come on people, wake up.>>

Ain't gonna happen.  To wake up means to acknowledge reality.  Once reality is acknowledged, then the party is over.  As long as it's party time, then why cash out when stawks are going to continue to go up, up, up...

Of course, once the bubble pops, those who lose everything will be squealing like stuck pigs that they were victims of XXXX (insert fall guy/black swan here).

ebworthen's picture

“The same f@#*ing thing they always do, nothing.  So stop asking”.

Well done, from top to bottom.  The FED is of the banks, by the banks, for the banks.

Coldcall's picture

hallelujah brother...

kchrisc's picture

Fractional-reserve banking is fraud.

"Printing" of fiat is counterfeit, theft.

Printed-fiat loans from the fractional-reserve bank system are always a theft founded on a fraud.

You don't need to repay the loan, as they need to repay you.

An American, not US subject.

 

Guillotine the Fed!