Fed Chair Powell’s Inescapable Contradiction
Fed Chair Powell’s Inescapable Contradictionfor Economic Prism
“This feels very sustainable.” – Federal Reserve Chairman Jerome Powell, October 8, 2019
Under the Influence
Conflict and contradiction. These were two of the main themes reverberating around the world of centralized monetary planning this week.
On Tuesday, for instance, a novel and contradictory central banker parlance – “reserve management purposes” – was birthed into existence by Fed Chair Jay Powell. We’ll have more on this later on. But first, to best appreciate the contradiction, we must present the conflict.
Free of government intervention, the economy and financial markets would get along within a low standard deviation. Extremes would appear from time to time. But they would be quickly reconciled and balance would be restored within the normal distribution of the mean.
Free of government intervention, an agreeable stability would be maintained. This can still be observed in remote areas; places free from the heavy hands of Washington, Beijing, and Brussels. For example, in remote areas, every village has an idiot. So, too, every idiot has a village.
Free of government intervention, near perfect harmony is preserved. This is how the world should work.
Of course, how the world should work, and how the world actually works are dramatically different. And how the world actually works, circa 2019, is under the extreme influence of central planners. Programs, policies, and procedures warp the bell curve, sending it askew.
Throw unrelenting central bank fake money credit creation into the mix, and things become lopsided to the extreme. What’s more, the natural reconciliation process becomes overwhelmed with greater and greater issuances of credit. The heat and pressure build until the whole thing melts down.
The End is Nigh
Over the last two decades we’ve conducted our own empirical research of the influence of central bank fake money credit creation. Our methodology is simple. We observe the world about us – both good and bad. When something cockeyed crosses our sights we zoom in for a closer look.
With our ears to the ground and our eyes scanning the horizon we ask two basic questions. Where is the money coming from? Where is it going? By following the money, some – but not all – aspects come into focus…