{"id":15416,"date":"2015-12-18T07:31:22","date_gmt":"2015-12-18T12:31:22","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15416"},"modified":"2015-12-18T07:31:22","modified_gmt":"2015-12-18T12:31:22","slug":"our-star-wars-economy-the-fed-farce-awakens","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15416","title":{"rendered":"Our “Star Wars” Economy: The Fed-Farce Awakens"},"content":{"rendered":"

Our “Star Wars” Economy: The Fed-Farce Awakens<\/a><\/h3>\n

The Fed’s hubris has led it to the Dark Side.<\/i><\/p>\n

It’s not just a movie, it’s real life: the Fed-Farce awakens.<\/b>\u00a0Now that the Federal Reserve has finally voted to “restore order to the galaxy” with a tiny .25% rate increase, the true measure of our\u00a0travesty of a mockery of a sham<\/i>\u00a0economy–in a phrase, The Fed-Farce–has been revealed.<\/p>\n

Here’s a snapshot of the Fed meeting, “restoring order to the galaxy” in a show of unanimous galactic-scale hubris:<\/p>\n

\"\"<\/p>\n

If we had to list the fatal wounds inflicted on the economy by the Fed-Farce’s financial repression, we might start with: the Fed’s flood of cheap credit has not boosted productivity, it\u2019s only boosted speculation.<\/b>\u00a0Why is this fatal?<\/p>\n

Productivity is the engine of wealth creation. Speculation is the engine of wealth inequality and devastating boom\/bust cycles.<\/b>\u00a0This is self-evident, but unfortunately the Dark Side can also conjure mind-tricks in the weak-minded (for example, Congress, the mainstream media, etc.): the Fed has successfully conned the weak-minded into believing that speculative frenzies of mal-investment and Fed-fueled asset bubbles are the sources of healthy growth.<\/p>\n

A funny thing happens when you give unlimited borrowing power at near-zero interest rates to financiers and corporations:<\/b>\u00a0they use the free money not to hire more people (that would be incredibly dumb–employees cost money!) but to\u00a0buy up shares in their own companies and snap up income-producing assets such as rental apartment complexes.<\/i><\/p>\n

$1 trillion in stock buybacks creates zero jobs.<\/b>\u00a0Borrowing $1 trillion to buy back shares (and thus boost the personal wealth of managers and owners) does not create a single job. Repurchasing the company’s stock reduces the number of shares outstanding, which increases your earnings per share\u00a0without increasing sales or net profits.<\/i><\/p>\n

In other words, stock buybacks are just another Dark Side mind-trick.<\/b><\/p>\n

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

Our “Star Wars” Economy: The Fed-Farce Awakens The Fed’s hubris has led it to the Dark Side. It’s not just a movie, it’s real life: the Fed-Farce awakens.\u00a0Now that the Federal Reserve has finally voted to “restore order to the galaxy” with a tiny .25% rate increase, the true measure of our\u00a0travesty of a mockery […]<\/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":[36,127,7223,11110,303,305,534,4924,4806,11109,11111,1939],"class_list":["post-15416","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-bubble","tag-charles-hugh-smith","tag-cheap-credit","tag-dark-side","tag-fed","tag-federal-reserve","tag-monetary-policy","tag-oftwominds","tag-speculation","tag-star-wars-economy","tag-stock-buy-backs","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15416","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=15416"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15416\/revisions"}],"predecessor-version":[{"id":15417,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15416\/revisions\/15417"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}