{"id":19020,"date":"2016-03-21T11:11:14","date_gmt":"2016-03-21T16:11:14","guid":{"rendered":"http:\/\/olduvai.ca\/?p=19020"},"modified":"2016-03-21T11:11:49","modified_gmt":"2016-03-21T16:11:49","slug":"19020","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=19020","title":{"rendered":"Interest Rates Are Never Going Back to Normal"},"content":{"rendered":"
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Interest Rates Are Never Going Back to Normal\u00a0<\/a><\/h3>\n<\/div>\n
\n

Grotesque Mutants<\/strong><\/p>\n

BALTIMORE \u2013 Let\u2019s see\u2026 U.S. corporate earnings have been going down for three quarters in a row. The median household income is lower than it was 10 years ago. And now JPMorgan Chase has increased its estimated risk of a recession to about one in three.<\/p>\n

\"Mutants\"From the grotesque mutants collection \u00a0 \u00a0\u00a0Image via residentevil.com<\/p>\n

These things might make sober investors wonder: Is this a good time to pay some of the highest prices in history for U.S. stocks? Apparently, they don\u2019t think about it\u2026<\/p>\n

Last week U.S. stocks rose again, after the Fed announced that it would go easy on \u201cnormalizing\u201d interest rates. The Dow rose 156 points on Thursday, putting it in positive territory for 2016.<\/p>\n

\"1-DJIA,<\/a>Dow Jones Industrial Average, daily \u2013 boosted by loose Fed talk \u2013 click to enlarge.<\/p>\n

Hooray! Investors \u2013 at least those who passively track the index \u2013 are even for the year. And with more central bank fixes, maybe they\u2019ll be able to keep their heads above water for the rest of 2016. Good luck with that!<\/p>\n

You may recall our prediction: The Fed will\u00a0never\u00a0<\/em>return to a \u201cnormal\u201d interest rate. Why not? Many Wall Street analysts say the Fed\u2019s move to bring interest rates to a more normal level \u2013 after seven years of ZIRP (zero-interest-rate policy) \u2013 was \u201ctoo early.\u201d<\/p>\n

We think it was too late. The Fed has already distorted too much for too long. Its EZ money policies have created a hothouse of speculation, mistakes, and misallocation of resources.<\/p>\n

The financial plants that grew up in that environment \u2013 grotesque mutants that require huge doses of liquidity \u2013 cannot survive a change of seasons. But these plants are big. And powerful.<\/p>\n

Washington\u2026 the health care industry\u2026 housing\u2026 Wall Street\u2026 They control the U.S. government, the bureaucracy, and major economic sectors \u2013 notably the $1 trillion-a-year security industry.<\/p>\n

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

Interest Rates Are Never Going Back to Normal\u00a0 Grotesque Mutants BALTIMORE \u2013 Let\u2019s see\u2026 U.S. corporate earnings have been going down for three quarters in a row. The median household income is lower than it was 10 years ago. And now JPMorgan Chase has increased its estimated risk of a recession to about one in […]<\/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":[5728,6190,303,305,431,534,1389,860,865,1939],"class_list":["post-19020","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bill-bonner","tag-fed","tag-federal-reserve","tag-interest-rates","tag-monetary-policy","tag-nirp","tag-wall-street","tag-washington","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19020","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=19020"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19020\/revisions"}],"predecessor-version":[{"id":19022,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19020\/revisions\/19022"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19020"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19020"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19020"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}