Raise Interest Rates? You Must Be Joking!

The idea that Janet Yellen would raise interest rates was nothing more than a useful deception. The Federal Reserve doesn’t want to publicly admit that they have absolutely no idea about how to help the economy other than shove interest rates to zero and beyond.

JanetYellen

So we get contradictory statements. On the one hand, Yellen assures us that we are going to keep pumping out new money and keep interest rates zero and sub-zero. But to seem like they are thoughtful, intelligent people who are implementing a strategy, they put out stories and rhetoric sometimes to indicate they might raise the rates.

And then they don’t.

Thus, the New York Times reports:

 Janet L. Yellen, the Federal Reserve chairwoman, said on Friday that the economy was improving but that the Fed was awaiting more evidence about the health of labor markets before deciding when to start raising interest rates.

Ms. Yellen’s first keynote speech at the annual conference here in the shadow of the Grand Tetons was mostly an extended explanation of the reasons for the Fed’s caution, and an effort to buy time for the Fed to deliberate. She emphasized her view that no single factor, including inflation, could be used to judge the recovery.

“While these assessments have always been imprecise and subject to revision, the task has become especially challenging in the aftermath of the Great Recession,” she said, both because of the downturn’s “nearly unprecedented” depth and because of simultaneous changes in the economy separate from the ups and downs of the business cycle, including the aging of the work force.

Ms. Yellen broke little new ground in her speech. She reiterated the Fed’s basic guidance after its July meeting that holding short-term interest rates near zero remains necessary and useful to increase employment. She said the gap between current conditions and a return to full health was still “significant.”

Yellen has no new ground to break. Her claims to want to stop shoving down interest rates should be taken as seriously as a heroin addict’s promise to quit the drug as soon as he can do so without risking withdrawal sickness.

The American economy is addicted to new money. It needs it just to pretend that it can grow. Even though we have reached the point where it doesn’t even work like it once did, our bankster regime can never give up the stimulus.