{"id":9106,"date":"2015-06-15T05:42:05","date_gmt":"2015-06-15T10:42:05","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9106"},"modified":"2015-06-15T05:42:05","modified_gmt":"2015-06-15T10:42:05","slug":"the-futility-of-our-global-monetary-experiment","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9106","title":{"rendered":"The Futility of Our Global Monetary Experiment"},"content":{"rendered":"

The Futility of Our Global Monetary Experiment<\/a><\/h3>\n

Jeff Deist<\/strong>: The Fed recently announced just this past week that it would not use specific dates for targeting higher Fed funds rate this year and you almost get the sense that poor Janet Yellen is at the end of this Greenspan-Bernanke experiment and there\u2019s not much left for her to do. I mean, what\u2019s our sense of Yellen and her position?<\/p>\n

David Stockman<\/strong>: Yeah, I agree with that. I think in some ways they\u2019re petrified as to where they ended up or they should be. After all, we\u2019re in an experiment of monumental proportions.<\/p>\n

Let\u2019s just assess where we are. If they don\u2019t raise the interest rate in June \u2014 and I think all the signals now are pretty clear they\u2019re going to find another reason to delay \u2014 that will mean seventy-eight straight months of zero rates in the money market. As I always say, the money-market price, that is the Federal Funds Rate or Overnight Money or a short term treasury bill, is the most important price in all of capitalism because that determines the cost of carry, the cost of speculation and gambling.<\/p>\n

When you conduct a monetary policy that says to the speculators, to the gamblers, \u201ccome and get it,\u201d you are guaranteed free money to carry your positions, whether you\u2019re buying German Bonds or you\u2019re buying the S&P 500 Stock Index or the whole array of yielding or price gaining assets that are available in the financial market. This monetary policy also sends the message that you can leverage and carry those positions for free and roll it day after day without worry because the central bank has pegged your cost and production, and in a sense has pledged on its solemn honor that it will not change without many months of warning. And that\u2019s what this whole thing is about \u2014 changing the language and so forth. I think you have created a massive distortion in the very heart of capitalism in the financial system.<\/p>\n

 <\/p>\n

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

The Futility of Our Global Monetary Experiment Jeff Deist: The Fed recently announced just this past week that it would not use specific dates for targeting higher Fed funds rate this year and you almost get the sense that poor Janet Yellen is at the end of this Greenspan-Bernanke experiment and there\u2019s not much left […]<\/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":[5144,111,122,2120,303,4468,305,388,6370,6058,6371,534,6372],"class_list":["post-9106","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bernanke","tag-capitalism","tag-central-bank","tag-david-stockman","tag-fed","tag-fed-funds-rate","tag-federal-reserve","tag-greenspan","tag-jeff-deist","tag-mises","tag-monetary-experiment","tag-monetary-policy","tag-stock-index"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9106","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=9106"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9106\/revisions"}],"predecessor-version":[{"id":9107,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9106\/revisions\/9107"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}