{"id":11335,"date":"2015-08-21T16:45:17","date_gmt":"2015-08-21T21:45:17","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11335"},"modified":"2015-08-21T16:45:17","modified_gmt":"2015-08-21T21:45:17","slug":"the-fed-is-bluffing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11335","title":{"rendered":"The Fed Is Bluffing"},"content":{"rendered":"

The Fed Is Bluffing<\/a><\/h3>\n

Interest Rates Won\u2019t Rise in 2015<\/strong><\/p>\n

The Janet Yellen Fed will not raise interest rates in any meaningful way anytime soon. Instead, she will announce new QE programs. On Wednesday, red was showing up just about everywhere \u2013 U.S. stocks, European stocks, Asian stocks, emerging markets stocks, crude oil\u2026 but it could have been worse\u2026<\/p>\n

U.S. stocks recovered some of their losses for the day, after the minutes of the most recent Fed meeting showed Yellen and team still won\u2019t pull the trigger on a rate hike until certain unspecified conditions are met.<\/p>\n

According to the Fed, the conditions for a rate increase are \u201capproaching\u201d but haven\u2019t been met yet. Well, guess what\u2026\u00a0Conditions will never be met<\/em>.<\/p>\n

\"dude\"They\u2019ll just drop in to see\u00a0what condition our condition is in\u00a0<\/a>\u2026
\nImage credit:\u00a0Ethan Coen<\/a><\/p>\n

Market Morphine<\/strong><\/p>\n

It doesn\u2019t work that way. This economy will never recover \u2013 not as long as it is under the current Keynesian management. It is like a patient attended by quack doctors \u2013 doomed to get sicker from their quack \u201ccures.\u201d Today\u2019s economy depends on large doses of cheap credit\u2026<\/p>\n

And like morphine, you have to up the dosage just to stay in the same place. Take away the drugs, and the pain rises. The pain caused by falling stock prices, for example. Take away the cheap credit\u2026 and the buybacks on Wall Street dry up.<\/p>\n

\"SPX,whiskey,morphine\"<\/a>What shall it be today, gentlemen? A coup de whiskey or a shot of morphine? We\u2019ve got it all! \u2013 click to enlarge.<\/p>\n

That means earnings per share \u2013 the ultimate driver of stock prices \u2013 fall, too. With falling corporate earnings and stagnant household incomes, the inevitable direction for stock prices is also down.<\/p>\n

 <\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The Fed Is Bluffing Interest Rates Won\u2019t Rise in 2015 The Janet Yellen Fed will not raise interest rates in any meaningful way anytime soon. Instead, she will announce new QE programs. On Wednesday, red was showing up just about everywhere \u2013 U.S. stocks, European stocks, Asian stocks, emerging markets stocks, crude oil\u2026 but it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,305,431,451],"class_list":["post-11335","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-federal-reserve","tag-interest-rates","tag-janet-yellen"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11335"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11335\/revisions"}],"predecessor-version":[{"id":11336,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11335\/revisions\/11336"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}