{"id":23763,"date":"2017-04-25T18:47:28","date_gmt":"2017-04-25T23:47:28","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23763"},"modified":"2017-04-25T18:47:28","modified_gmt":"2017-04-25T23:47:28","slug":"the-fed-will-blink","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23763","title":{"rendered":"The Fed Will Blink"},"content":{"rendered":"
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The Fed Will Blink <\/a><\/h3>\n<\/div>\n
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Honest Profession<\/strong><\/p>\n

GUALFIN, ARGENTINA \u2013 The Dow rose 174 points on Thursday. And Treasury Secretary Steve Mnuchin said we\u2019d have a new tax system by the end of the year.<\/p>\n

Animal spirits were restless. But which animals? Dumb oxes? Or wily foxes? Probably both.<\/p>\n

\"\"<\/a>Since Thursday there have been two additional very spirited up days with large gaps \u2013 this is very rare in the DJIA, particularly from such a high level after a ~240% rally since the lows made 8 years ago\u2026 it continues to feel like a blow-off (and it happens against the backdrop of a sharp slowdown in money supply growth) \u2013 click to enlarge.<\/p>\n

But what caught our attention were the central bankers strutting across the yard and crowing with such numbskull cackles that even barnyard animals would be embarrassed by them. There was a time when central banking was an honest profession.<\/p>\n

Central bankers provided financing for the government. They backed the banking system, too, by holding savings as reserves, which they lent to solvent member banks in emergencies. They were tight-lipped, tight-laced, and tightwads. Their role was to say \u201cno\u201d more often than \u201cyes.\u201d<\/p>\n

When the king wanted money to fight in a war\u2026 or build a bridge\u2026 the banker would give the terse reply: \u201cSire, we don\u2019t have any.\u201d Real money was backed by gold. And credit had to be backed by real money, which meant it had to be saved. Savings were limited, as was money.<\/p>\n

\"\"Cackling central planners \u2013 this reminds us of the \u201cFOMC meeting laughtrack\u201d of 2003-2007 \u2013 the more Fed members laughed at their meetings, the closer the economy and financial system came to the near fatal implosion of 2007-2009. Do today\u2019s monetary bureaucrats have more of a clue than their predecessors just before the GFC? The answer is an emphatic no \u2013 they have simply doubled down and blown an even bigger credit and asset bubble.<\/p>\n

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

The Fed Will Blink Honest Profession GUALFIN, ARGENTINA \u2013 The Dow rose 174 points on Thursday. And Treasury Secretary Steve Mnuchin said we\u2019d have a new tax system by the end of the year. Animal spirits were restless. But which animals? Dumb oxes? Or wily foxes? Probably both. Since Thursday there have been two additional […]<\/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":[5728,6190,124,125,7551,303,15208,1138,3650],"class_list":["post-23763","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bill-bonner","tag-central-banks","tag-central-planning","tag-dow-jones-industrial-average","tag-fed","tag-steve-mnuchin","tag-stock-market","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23763","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=23763"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23763\/revisions"}],"predecessor-version":[{"id":23764,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23763\/revisions\/23764"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}