Saturday

The FED Has NO Exit

I think we all know the Fed’s irresponsible. Zero interest rates and printing money. I mean, everybody on the planet Earth knows it’s irresponsible. Lots of people are prepared to fade the Fed, and play the game and all that.

So the Fed, from time to time, has to appear like they’re acting more responsibly. That’s why they keep coming out with this chatter in the minutes of the meeting and things like that. “Well, we could plan an exit from the bond strategy after QE1 and QE2.” Of course, there never was an exit, by the way, but you got to keep saying it to make everyone think that you’re being responsible.

Because, you know what, there are not just people in the Western capitalist area that watch what’s going on in the United States of America. There’s the Chinese, and the Russians, and the non-aligned people who are looking in and saying, “Oh my god, what are those people doing printing all that money and having zero interest rates? Maybe I don’t want to own these dollars.”

So, they have to, from time to time, appear to be responsible. I think that’s what they use the minutes of the meeting for. Never, of course, the real action, but the talk is what they use to try to persuade people that they’re being somewhat reasonable, even though when they start the actual activity, they don’t change anything. They talk the talk. They don’t walk the walk.