Tag Archives: patient

“OH NO!” – The FOMC Forgot The Word “Patient”

Reader response:  “Dave, you are right. I just turned on Bloomberg TV and every 2nd word is “patient”. What a joke! (Michael P);    “This whole market is embarrassing”(Chris G)

I wonder if Grandma Yellen forgot her Depends today (play on an old undergrad economics class joke that the favorite phrase of economists in response to a question is, “well it depends”).

If measured in terms of manpower dollars/hour, the word “patient” is probably the most expensive word in history.   Think about – in terms of dollars paid per hour – all the extraordinarily overpaid Wall Street analysts and buy-side fund managers who spent the better part of the last month talking about the word “patient.”  How about the amount advertising dollars spent during the time used while idiots on financial tv blew hot air discussing the word “patient.”

And then there’s this (source: Marketwatch, edits are mine) – click to enlarge:

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The above pic shows the 12 FOMC voting plus other sundry Fed “Einsteins.”  Perhaps collectively they might have the brainpower of Shakespeare.   21 Fed officials – probably about $10 million combined in annual compensation.   Think about, from a cost allocation standpoint, how many hours were spent by this brain trust determining whether or not to include the word “patient” in today’s FOMC policy statement and, if not, how to leave it out in a way which implies that we won’t raise rates any time soon.

And now the poor saps who have nothing better to do than watch CNBC, Bloomberg or Fox Business all day long are going to be subjected to another couple weeks of incessant squawking about what the removal of the word “patient” means and to grotesquely foolish forecasts for when the Fed might ever so slight nudge interest rates up one-quarter of one percent.

Here’s your answer – for free:  NEVER.   Not until the market forces the issue and by then the entire U.S. financial and political system will have collapsed.

The “Patient” Insanity

Here’s a prediction, highly educated/paid analysts and “economists” will spend more time debating whether or not the FOMC will remove the word “patient” this week than they spend collectively in an entire year researching and analyzing the actual data and fundamentals underpinning our entire Ponzi system.

Whether or not the FOMC removes one word from its “policy” statement is completely irrelevant to the discussion that should be occurring about whether or not our financial and economic system is collapsing  Which it is.

In fact, the issue of whether or not the Fed raises its Fed rate to .25 from zero – and it’s effectively a negative rate after real inflation is accounted for – is complete lunacy.  Zero-percent interest rates are not stimulating real economic growth.  Raising rates an insignificant amount after 72 months of ZIRP will not have a significant affect on the economy.   The Fed could take rates nominally negative and it won’t stimulate growth.  It will stimulate a bigger financial bubble, which seems to be all the Fed cares about.

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Here’s my prediction:   Our system is at the beginning of a  massive collapse.  The early stages of Mises’ “crack-up boom.”   The Fed is entirely irrelevant anymore except to the extent that it enables the big banks and elitists to loot our system.   That’s why they put a useless piece flesh like Grandma Yellen at the helm.  She knows how to follow orders.