Thursday, October 15, 2015

Wherefore the Fed?

Will they or won’t they? Will the Federal Reserve raise interest rates this month, next month or next year.

Everyone, it seems, is waiting on the Fed.

Being as I know very little about these matters, I do not offer an opinion. I was intrigued, however, by this remark from the most recent Aden Forecast, a newsletter (sub. req.) published by Mary Anne and Pamela Aden. While everyone seems convinced that the Fed will act this year or early next year, the Aden sisters believe that the Fed might hold off raising interest rates for longer than anyone imagines.

They write:

One important reason why is because next year is an election year. As our dear friend Chuck Butler points out... The current Fed Board of Governors are all Obama appointees and presumably Democrats. What if the Fed hikes interest rates in early 2016 and the economy goes into a recession right in the middle of a presidential campaign? It would surely hand the election to the Republicans.

Since no one else, to my knowledge, is claiming that the Fed governors could be influenced by politics, the laws of contrary opinion suggest that they probably are.

For some perspective, yesterday the Wall Street Journal explained:

The chances of a Federal Reserve interest-rate increase in 2015 are diminishing amid new signs of anemic economic activity, a disappointing development for central bank officials who have been hoping to move this year after a prolonged period of easy-money policies.

Lackluster readings on consumer spending, inflation and jobs have virtually eliminated the chances of a move this month. Already, two Fed governors expressed doubts this week about whether the timing will be right this year, and the recent trove of data hasn’t reassured top officials about the economic outlook.

I report this for what it’s worth.


Ares Olympus said...
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Ares Olympus said...
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Ares Olympus said...

Well, at least I found an archived 2003 Forbes interiew with the sisters, way back just before gold went exponential, so they've been around a while and must have a loyal following whether or not their speculations about the corruption of the federal reserve by partisan forces.
When Mary Anne Aden and Pamela Aden left Long Beach, Calif. for San Jose, Costa Rica in 1974, they planned to spend one year with their recently divorced Costa Rican mother. Instead, the college-age sisters met a private investor doing computerized investment analysis long before its time. He taught them about investing. Nearly 30 years later, they are both married and settled in Costa Rica, and have been publishing a monthly newsletter, The Aden Forecast since 1982. The sisters live a block apart from each other, and Pamela has taken to raising tropical animals, including an ocelot.

Ares Olympus said...

p.s. If you like fun financial conspiracy thoughts (even better nonpartisan), I came across this recent documentary "The Forecastor" about Martin Armstrong. It's hard to evaluate a sympathetic documentary, but it seems to be a fact that he went to prison on charges of a pyramid scheme that didn't exist (since no one lost any money). Whatever else it shows, it says the courts don't exist for justice, but for powerful people to lean on problem people, an extremely disturbing charge of corruption.

Anyway Armstrong's claim to fame is some dubious numerology, seeing economic chaos repeating over an 8.6 year period, which his inner Pythagorean saw as a mystical 1000 divided by pi days, and what makes it interesting is it of course matched the 2008 crash, AND coincidentally repeats this monty, 2015.75 or October 1.

His other observation was that military action seemed to also correlate to such times, and so we might consider Putin's Syria military strikes as a part of the pattern, along with the increased risk of direct confrontation beween Russian and U.S forces, or Obama's recent call for the U.S. to go back into Afghanistan.

Sure too easy to cherry pick facts to fit any pattern, and Armstrong's 2015.75 date is supposed to be around large sovereign debt failures which are not yet apparent, but certainly everything looks ugly now, and nothing would be suprising any more. So as can say "heads up", but still accept there's nothing we can do.

And so its easy enough to predict the Federal reserve will NOT raise interest rate, and perhaps never again, while what they do next will have to be much more dramatic than what's they've done so far.

It may be best to see central bank policies NOT as partisan, but as financial warfare, and since we know "Alls fair in love and war", that means the Federal reserve is above any law, and we'll let them do whatever they want, as long as their financial carnage is greater to our rivals than ourselves.

That might be the world we live in for the moment, however long it can last.

Anonymous said...

Non-partisan conspiracy theories, O Olympic One? You cannot be serious. -$$$