I thought it might be useful to some readers to provide a translation of
today’s statement by the Fed on behalf of its Federal Open Market Committee.
Though the statement is in English, it tends toward Orwellian Doublespeak,
which might be construed as misleading. In fact, I don’t understand why these
statements aren’t prefaced with a disclaimer outlining the forward looking
nature of these statements, and how theses statements are made by individuals
who have a vested income in the result such statements induce – namely,
buying of stocks and bonds in U.S. markets.
So, in the interests of simple visual differentiation, the verbatim text
of the FOMC statement is in italics, and my translation is not.
“Information received since the Federal Open Market Committee met in
June suggests that economic activity expanded at a modest pace during the
first half of the year.”
No real economic growth occurred, and the information is a self-generated
reflection of the $85 billion fabricated out of thin air by the Fed each
month.
“Labor market conditions have shown further improvement in recent
months, on balance, but the unemployment rate remains elevated.”
No new jobs have actually materialized. We just booted more people out of
the column we arbitrarily adjust to reduce the volume of people we define as
unemployed. Thus, this number is meaningless, while being very
misleading.
“Household spending and business fixed investment advanced, and the
housing sector has been strengthening, but mortgage rates have risen somewhat
and fiscal policy is restraining economic growth.”
The housing sector is strengthening only in terms of the fact that our
buying $45 billion a month in mortgage securities makes houses worth flipping
back and forth to generate profits for the big banks who are the recipients
of our largesse. These are generally people who support us politically.
Mortgage rates are rising as a direct result of our purchase of $45 billion a
month in mortgage securities, which creates the appearance of demand for
mortgages, and thus mortgage prices rise slightly in response to the
competition for available housing supply.
Partly reflecting transitory influences, inflation has been running
below the Committee’s longer-run objective, but longer-term inflation
expectations have remained stable.
We have become as devious and duplicitous in our methodologies for
generating statistical inflation data as we have for statistical employment
data, and so, as is the case with employment numbers, these numbers are
essentially meaningless, but quite effectively misleading.
Consistent with its statutory mandate, the Committee seeks to foster
maximum employment and price stability. The Committee expects that, with
appropriate policy accommodation, economic growth will pick up from its
recent pace and the unemployment rate will gradually decline toward levels
the Committee judges consistent with its dual mandate.
We are desperate to maintain the illusion of prosperity that our
co-conspirators the Financial Media are able to project through our
relentless manipulation of statistical data and so we will continue to create
statistical incremental economic growth and improving employment regardless
of what actually happens in the real world.
This is the boilerplate self-promotional statement we incorporate into
every FOMC statement to remind the public that we are utterly delusional
about our role and effectiveness at executing these functions.
The Committee sees the downside risks to the outlook for the economy
and the labor market as having diminished since the fall.
We don’t actually believe there is any hope of genuine economic growth or
employment improvement whatsoever.
The Committee recognizes that inflation persistently below its 2
percent objective could pose risks to economic performance, but it
anticipates that inflation will move back toward its objective over the medium
term.
The only thing we fear more than rampant inflation is deflation or
stagflation. These are both present and growing but there’s nothing we can do
about it.
To support a stronger economic recovery and to help ensure that
inflation, over time, is at the rate most consistent with its dual mandate,
the Committee decided to continue purchasing additional agency
mortgage-backed securities at a pace of $40 billion per month and longer-term
Treasury securities at a pace of $45 billion per month.
We found out the hard way that the only way the market will continue to
reflect the billions in corporate welfare we are injecting into it through
our counterfeiting program is to continue it, and so despite representations
of tapering or ending Quantitative Easing, there’s absolutely zero chance of
us actually doing that.
The Committee is maintaining its existing policy of reinvesting
principal payments from its holdings of agency debt and agency
mortgage-backed securities in agency mortgage-backed securities and of
rolling over maturing Treasury securities at auction. Taken together, these
actions should maintain downward pressure on longer-term interest rates,
support mortgage markets, and help to make broader financial conditions more
accommodative.
The Committee will closely monitor incoming information on economic
and financial developments in coming months. The Committee will continue its
purchases of Treasury and agency mortgage-backed securities, and employ its
other policy tools as appropriate, until the outlook for the labor market has
improved substantially in a context of price stability.
It is likely that we are going to have to ramp up our counterfeiting
program as the corporate welfare program is growing less effective at
generating ersatz GDP and so the cost of perpetuating the illusion of
prosperity through the mainstream financial media will probably go up.
“The Committee is prepared to increase or reduce the pace of its
purchases to maintain appropriate policy accommodation as the outlook for the
labor market or inflation changes.”
We are repeating ourselves for the sake of dramatic effect
In determining the size, pace, and composition of its asset purchases,
the Committee will continue to take appropriate account of the likely
efficacy and costs of such purchases as well as the extent of progress toward
its economic objectives.
We are desperate and don’t know what else to do.
To support continued progress toward maximum employment and price
stability, the Committee today reaffirmed its view that a highly
accommodative stance of monetary policy will remain appropriate for a
considerable time after the asset purchase program ends and the economic
recovery strengthens.
We are so at a loss as to what to do, that we think repeating ourselves is
probably a good strategy.
In particular, the Committee decided to keep the target range for the
federal funds rate at 0 to 1/4 percent and currently anticipates that this
exceptionally low range for the federal funds rate will be appropriate at
least as long as the unemployment rate remains above 6-1/2 percent, inflation
between one and two years ahead is projected to be no more than a half
percentage point above the Committee’s 2 percent longer-run goal, and
longer-term inflation expectations continue to be well anchored.
This is how we will use the savings of citizens far more responsible than
ourselves to service our debt while at the same time ensuring free money for
our partners in crime at major world financial institutions. Besides – if we
allowed the rate to rise we would be actually bankrupt and not just
technically bankrupt.
In determining how long to maintain a highly accommodative stance of
monetary policy, the Committee will also consider other information,
including additional measures of labor market conditions, indicators of
inflation pressures and inflation expectations, and readings on financial
developments. When the Committee decides to begin to remove policy accommodation,
it will take a balanced approach consistent with its longer-run goals of
maximum employment and inflation of 2 percent.
We promise not to cause any market tantrums by head-faking the market with
vapid statements about ending this financial welfare to which the markets
have obviously become severely addicted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke,
Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke;
Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren;
Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen.Voting against the
action was Esther L. George, who was concerned that the continued high level
of monetary accommodation increased the risks of future economic and financial
imbalances and, over time, could cause an increase in long-term inflation
expectations.
Esther L. George is the only sane one among us and so she will be booted
off the FOMC and out of the building at our earliest opportunity. If she
talks to the media, we’ll have her killed. With a drone.
