January 5, 2011
Fed to Make Benchmark Rate Forecasts … Federal Reserve officials will for the first time make public their own forecasts for the federal funds rate at their Jan. 24-25 meeting, according to minutes from last month’s Federal Open Market Committee released today. FOMC “participants decided to incorporate information about their projections of appropriate monetary policy” into their Summary of Economic Projections starting with their next meeting, the minutes said. The move marks another stride toward greater transparency under the chairmanship of Ben S. Bernanke. – Bloomberg
Dominant Social Theme: If you understand us better, you’ll start to like us!
Free-Market Analysis: The Federal Reserve is at it again. This increasingly despised institution’s leaders seem to believe that by making the Fed’s unconstitutional behavior more “transparent” – clearer – they will somehow make it more palatable as well.
This article by Bloomberg is a “doozie” with an important dominant social theme on display. The idea is fear-based, of course. The underlying, unspoken statement is that the world NEEDS central bankers and that, in this case, people are upset with the Fed simply because they don’t understand the deliberations of its wise men.
The entire impetus is immensely patronizing. People fear what they don’t understand, the Fed’s honchos seem to be reasoning. Thus, let us give the hoi polloi a bit more information and they will start to understand the worthiness of our deliberations and the reasons for our dispensations. Here’s some more from the article:
By releasing their forecasts, central bankers are likely to alter expectations for the timing of the first increase in their benchmark rate, which has been kept near zero since December 2008. Last month, Fed officials repeated their view that economic conditions would warrant “exceptionally low levels for the federal funds rate at least through mid-2013.”
“A number of members indicated that current and prospective economic conditions could well warrant additional policy accommodation,” the minutes said. Those members also decided that “any additional actions would be more effective if accompanied by enhanced communication” about the FOMC’s longer- run economic goals and policy framework.
Fed officials will show investors their forecast for the federal funds rate in the fourth quarter of 2012 and the next few calendar years, and over the longer run, the minutes said. The summary of forecasts “also will report participants’ current projections of the likely timing of the first increase in the target rate given their projections of future economic conditions.”
These excerpts really bring the fantasy-land of modern finance into focus. One of the things that makes Austrian economics (the economics that the Daily Bell subscribes to) so subversive, from the establishment’s point of view, is its emphasis on human action. Its foremost scholar, Ludwig von Mises, even wrote a book called Human Action.
The idea behind human action is that no matter what actions government takes and no matter what laws are passed, the results will always be different than what is expected. That’s because people will REACT to the actions of a higher authority with their OWN actions.
You push, and people pull. You pull, and people push. This is also why regulations don’t work. People are always going to react by attempting to do what is in their own self-interest. The more the economy is distorted by command-and-control dictates, the more people will try to observe their own priorities, legally or not. This is how first gray and then black markets are created.
Another issue to consider is one of plain, old financial literacy. In fact, every law and regulation is a price fix, distorting the marketplace and transferring wealth from those who create wealth to those who didn’t create it and often don’t know how to use it productively.
Price fixing is inherently unworkable and distortive. But central banks are price fixing machines! The good, gray men meeting to determine monetary policy are deciding on the price and volume of money. They are FIXING these values. Why?
Well … because control over the source and fount of money provides those men with enormous influence and power. And the Anglosphere power elite that apparently has built up a network of central banks around the world derives literally trillions of dollars in power and influence from their participation.
Central banks are the funding stream of one-world government. Without central banking and the ability to print money-from-nothing, the one-world conspiracy itself would begin to founder. Leviathan itself would begin to starve.
The impossibly expensive prison-industrial complex would begin to wither; far-flung military forces would gradually return home; the entire bought-and-paid-for media complex would begin to fracture. Truth would begin to leak out …
The Anglosphere power elite simply cannot afford to let the central banking meme die. At the same time, the meme IS dying. We have charted the progress of its death via these pages for some two years now.
It is the nature of the ‘Net and the Internet Reformation: What central banks do these days they often do in the full glare of the public spotlight. What might have turned up in a polite and elaborate article on the front page of the New York Times is instead dissected in a thousand blogs with a good deal of temerity and boldness.
Because of this, the impossible figures that modern Western banks issue out to favored businesses have become well known. They cannot be justified. The issuance of tens of trillions to failing banks and corporations is simply not palatable to the millions, and even billions, losing their homes and jobs and families.
There is no answer to this essential immorality. There is no response to the idea that a handful of people control the wealth of the world. What answer there is, we see, has to do with making central banks – and the Fed in particular – more “open” and “transparent.”
This is, to put it bluntly, idiocy. One does not cure a problem by making its inner workings more evident. The difficulty with central banking is that it is an economically illiterate activity. How does providing a schematic of this illiteracy in any way ameliorate its presence?
This Bloomberg article makes abundantly clear what is going on. Fed honchos meet with each other and use unreliable, government-collected data to try to determine how much money to issue out at what price.
Of course, this is actually a simplification of what occurs. There are indeed other players and actors. But it all comes down to the same thing. PEOPLE are deciding how much money to print. And people CANNOT KNOW.
The result is ruin and devastation. And those running these systems understand full well what their results are. The constant centralizing and debasement of currency that comes from central banking suits them, however. They apparently aim to use it to implement one-world government.
The more miserable people get, the more dysfunctional the larger economy is, the more people will welcome, in desperation, yet more centralizing, including a nascent, central money.
This is the method behind the insanity. Central banks are likely a deliberately destabilizing mechanism. And yet … providing clarity to lunacy is not an apt anodyne. What makes the honchos at the Fed believe that by illustrating their incompetence with more clarity they will win over their critics?
Do the elites that were so successful in the 20th century have a clue of how to deal with their relentless exposure in the 21st? Do they? The response seems to be a sudden expansion of authoritarianism and war. Not a very satisfactory answer in our view.
More and more it seems to us that “they” are playing a desperate game, trying to keep the proverbial balls in the air as they attempt to progress with alacrity toward their New World Order. But we wonder if they will be able to accomplish this great, if malevolent, task.
Conclusion: Perhaps they will end up taking a step back, as they have before.
This article was posted: Thursday, January 5, 2012 at 3:43 am